The drop in house prices deepened last month to the leave the market at its weakest since 2009 as mortgage approvals plummeted.

Homeowners saw the value of their bricks and mortar drop by 5.3pc in the year to August, according to the Nationwide house price index, wiping £14,600 off their value over the last year.

Compared to the previous month, prices were down 0.8pc as the market contends with 14 consecutive interest rate rises by the Bank of England to 5.5pc.

The survey found that the value of a typical house fell to £259,153, compared to £260,828 the month earlier, leaving prices 5.3pc lower than when prices peaked in August last year.

Economists warned there is worse to come, with Andrew Wishart, senior property economist at Capital Economics, suggesting prices would drop 10.5pc from last year’s peaks by mid 2024.

Nationwide’s chief economist Robert Gardner said: “The softening is not surprising, given the extent of the rise in borrowing costs in recent months, which has resulted in activity in the housing market running well below pre-pandemic levels. 

Earlier this week the Bank of England revealed that banks and building societies approved just under 49,500 mortgages for home purchase in July, the lowest number since February and down from more than 63,000 a year ago.

Mr Gardner added: “The relative weakness of mortgage activity reflects mounting affordability pressures as a result of the sharp rise in mortgage rates since last autumn, which would not have affected cash buyers.”

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