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The average house price has now fallen to £147,746, compared with £179,358 at the same point last year.
Commenting on the figures Fionnuala Early, Nationwide's Chief Economist, said: "Sharp cuts in interest rates have helped affordability, but have not yet affected housing market confidence to boost the levels of new transaction activity or slow the pace of house price falls.
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"Early signs of increased interest in housing, as reported by the pick up in new buyer enquiries, have yet to filter into sales, but do suggest that falling prices and interest rates are raising curiosity now, which could flow through quickly once confidence returns."
Recently, estate agents have reported that new buyer enquiries have began to pick up, however this does not seem to have improved house prices.
Ms Early continued: "The February Inflation Report also implies that the MPC has not finished cutting interest rates yet. First, the Bank's economic forecast factoring in a 25bp cut, left inflation significantly below its target two years ahead and GDP contracting sharply.
"Second, Mervyn King clearly stated that "further easing may well be required" when asked how much further rates could fall – a sentiment subsequently echoed by other MPC members.
"Further cuts in rates will be welcome in the housing market, but the economic conditions that require them will mean that there is unlikely to be a swift turnaround in the housing market in 2009."
(CD/BMcC)
