AVERAGE UK house prices fell by a seasonally-adjusted 0.5% in July, according to figures released by Nationwide Building Society.

Its figures also show the annual rate of house price inflation has slipped back further from 8.7% to 6.6% and that market conditions are easing further with buyers still in short supply.

Martin Gahbauer, Nationwide's Chief Economist, said: “House prices fell in July for the first time since February.

"The price of a typical UK property fell by a seasonally adjusted 0.5% month-on-month, after having been unchanged in June.

"The 3-month-on-3-month rate of change – a smoother indicator of the near term price trend – fell from 1.7% in June to 1.3% in July, significantly below the peak of 4.0% reached in September 2009.

"There was also a sizeable drop in the annual rate of house price inflation from 8.7% in June to 6.6% in July, due in part to the strength of house price gains in the same month last year.”

The Bank of England said this week that the number of fresh mortgages approved for house purchase in the UK fell from 49,461 in May to 47,643 in June on a seasonally-adjusted basis.