Figures from the Nationwide Building Society have found that house prices in the UK have dropped by 8.1% in the past year to July, the fastest rate of decline since the Nationwide began publishing figures in 1991.

Prices fell by 1.7% in July meaning the average price of a home in the UK now stands at £169,316 - almost £15,000 less than 12 months ago and lower than it has been at any point since August 2006.

The number of homes sold has also fallen to record lows in recent months, with the Bank of England reporting this week that just 36,000 mortgages were approved for purchases in June.

With demand for housing low, more stringent conditions being applied to mortgage applicants and lenders finding wholesale funding scarce and expensive, a bottom to the housing decline remains far out of sight.