House prices fell by 5.3% in the year to August - a bigger-than-expected drop, according to Nationwide.

The typical home is now worth £14,600 less than 12 months ago - with an average property price of £259,153.

Nationwide's chief economist Robert Gardner said the softening was "not surprising" - with interest rate hikes by the Bank of England sending mortgage payments higher, Sky News reported.

Activity in the housing market is currently running well below pre-pandemic levels - with mortgage approvals about 20% below the 2019 average in recent months.

But after Nationwide's latest House Price Index was released, Mr Gardner said "a relatively soft landing is still achievable".

He said unemployment was expected to remain low (below 5%) and the vast majority of existing borrowers should be able to weather the impact of higher borrowing costs, given the high proportion on fixed rates.

According to Nationwide, there was a 25% drop in first-time buyers in the first half of 2023 when compared with 2019.

There has also been a shift in the types of properties being purchased - with a big decline in demand for detached houses as buyers look for smaller, less expensive places to live.

The evolving cost of living crisis has squeezed affordability and demand at estate agents. The Bank of England wants a wider economic slowdown to help cool the pace of price rises.

Data released by the Bank earlier this week showed that mortgage approvals had dropped by almost 10% last month.

Separate figures from property website Zoopla suggested that the UK was on track for about one million house and flat sales by the end of this year - the lowest level since 2012.