House prices in the UK fell by 8.1% over the 12 months to July, according to figures released by Nationwide.

The building society said the annual fall was the largest it had ever recorded since it started the survey in 1991, and that house prices dropped by 1.7% in July alone.

House prices have now fallen for nine months in a row and are at their lowest level since August 2006, the survey found.

"The weakening economy and poor housing market sentiment do not suggest that the market will recover quickly," said Fionnuala Earley, chief economist at Nationwide.

A separate report by Standard & Poor's predicted that 1.7m homeowners would be plunged into negative equity next year, with prices expected to fall a further 17%.