UK house prices fall 0.9 per cent in June - Nationwide

British house prices fell for an eighth straight month in June to stand more than seven per cent below the peak hit last year, according to a survey yesterday which is likely to fan fears the market is on the verge of a crash.

The Nationwide building society said prices fell 0.9 per cent last month after a 2.5 per cent drop in May which had been the sharpest fall since the series began in 1991.

House prices have been falling non-stop since peaking last October at an average £186,044, according to Nationwide data, and stood 6.3 per cent lower than a year ago in June, the weakest annual rate since December 1992.

Economists say the housing market can only get bleaker this year due to weak demand, tighter lending conditions and a slowing economy. Bank of England policymaker David Blanchflower has even warned of a 30 per cent slide in house prices.

"The tightening of credit conditions along with changing expectations of house price growth and a general weakening in consumer confidence in the economy have led to a severe slowing in housing market activity," said Fionnuala Earley, Nationwide's chief economist.

Bank of England data on Monday showed lenders approved the lowest number of new home loans on record - just 42,000 - in May and some analysts say prices could drop by as much as 20 per cent this year.