House prices declined 0.7% in September from the previous month, according to figures released by building society the Nationwide.

The average home now costing £164,381 - which is still 1.4% higher than it was a year ago.

"If the recent trend in house prices were to continue through November and December, the annual rate of house price inflation would drop to between 0% and -1% by the end of 2010," said Nationwide's chief economist Martin Gahbauer.