UK house prices have fallen in August suggesting the housing market is levelling out.

According to the latest figures from Nationwide, house prices in the UK have fallen for the second consecutive month in August.

The Nationwide house price index published today (2 September) has shown that the housing market has experienced a slight dip of 0.9% in August, which followed a 0.5% decline in July. The average price of a home in the UK is now £166,507.

Martin Gahbauer, Nationwide’s Chief Economist, commented: “This is the first time since February that house prices have fallen in two consecutive months.

“The 3 month on 3 month rate of change – generally a smoother indicator of the recent price trend – fell from 1.2% in July to 0.0% in August, suggesting that house prices have essentially stagnated over the summer.”

The annual rate of house price inflation also fell steeply to 3.9% in August from 6.6% in July.

Mr Gahbauer also added: “Recent market trends remain consistent with an unwinding of the supply-demand imbalance that drove up prices for much of last year. As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices.”

However, due to house price increases last year getting ahead of inflation, the drop in prices over the past few months is not to be taken as an “unhealthy development”. In fact, the fall indicates that the market may be levelling out.