The rate of house price falls slowed to 0.9% in June from the record 2.5% in May, according to figures released by Nationwide Building Society.

But prices were now 6.3% lower than they were a year, the research found, and the average price of a house has fallen by over £13,000 since the market peaked in October 2007.

The Bank of England has revealed that the number of new mortgages being approved for house purchases in May saw a 28% fall on April and was 64% lower than a year ago.

The number of new loans has now fallen for 13 months in a row while house prices have fallen for eight months in a row.