The figures from the Land Registry showed the annual rate of growth has been falling for 12 months to hit its lowest level since its series began in 2001.

Properties lost a further 1.9% of their value during August, the biggest monthly fall ever recorded by the group, to leave the average house costing £174,493.

This comes after two months of flatlining prices and several months of falling growth, as the impact of the credit crunch is felt on the market.