The average home now costs £169,316 which is nearly £15,000 cheaper than in the same month last year.

The nationwide survey still found that property prices were still £11,000 higher than three years ago but currently sellers are remaining reluctant to accept lower offers

The lack of availability of mortgages is pushing down house purchase activity, which is having a negative knock on effect to the rest of the economy.

Meanwhile consumer confidence fell to a record low as the economy is teetering closer to recession as the index of confidence based on a survey of 2,001 people by GfK NOP Ltd fell 5 points to minus 39 which is the lowest since the data began in 1974.

Nationwide’s chief economist did indicate that the weakening economy and poor housing market sentiment suggests that the market will recover quickly and that confidence in the market will install greater stability in house prices.

The Bank of England said that the number of home loans approved in June fell to 36,000, down from 41,000 in May.

On the other hand the National Housing Federation are far more optimistic as they said that they are expecting house prices in England to rise by 25% by 2013 and this is also backed by

The Centre for Economic and Business Research (CEBR) indicated that the reduction in housebuilding during the credit crunch could result in a 30 percent rise in prices between the end of 2009 and 2012.