The average property in the UK has lost more than a tenth of its value over the last year, according to the latest research from Nationwide.
The latest house price index from the building society shows UK property prices fell 1.9 per cent during the course of August, taking annual falls to 10.5 per cent.
This is the first time falls have entered double digits since 1990, Nationwide confirmed. Furthermore, prices have now fallen for ten months in a row to the lowest level recorded since early 1996.
As a result, the average property now costs £164,654 well below the figure of £183,898 recorded a year ago.
"Recent activity levels in the housing market have been very subdued," explained Nationwide's chief economist, Fionnuala Earley.
"House builders in particular have been reporting significant reductions in site visits and reservations of new properties since this time last year, in spite of a big increase in the use of sales incentives."
Earlier this week, housebuilders Taylor Wimpey
reported sharp falls in profits and confirmed job losses made earlier in the year.
Yet, Nationwide suggests the data "is a little more optimistic and suggests that there may be some glimmers of interest returning to the market". There has been an increase in viewings, for example, with buyers perhaps spurred by a fall in prices.
However, an oversupply of properties on the market is likely to dampen prices further in the short-term.
Behind the decline in property prices is a restriction in mortgage lending, explains Nationwide.
"There is clearly less mortgage borrowing taking place in the current market, but those borrowers choosing a new loan are tending to opt for fixed rate loans, even though they have been more expensive than trackers," added Ms Earley.
Earlier this month, figures from the Council of Mortgage Lenders (CML) revealed the slump in mortgage lending continued in earnest during July.
Total lending stood at £24.8bn, 27 per cent lower than a year ago.