House prices fell last month to fresh 14-year lows as buyers grappled with increasingly unaffordable mortgage costs.

The average cost of a property declined by 4.6pc in the year to August, according to the Halifax house price index, having dropped by 2.4 in July.

It was the worst decline since 2009 and means a typical home is worth £279,569. This is down from £285,044 the previous month and around £14,000 lower than a year ago. 

Prices fell 1.9pc in August, marking the fifth consecutive monthly decline and the worst fall since November last year.

Halifax Mortgages director Kim Kinnaird said: “There is always a lag-effect where rate increases are concerned, and we may now be seeing a greater impact from higher mortgage costs flowing through to house prices.”

She added: “Market activity levels slowed during August, and while there is always a seasonality effect at this time of year, it also isn’t surprising given the pace of mortgage rate increases over June and July.”

It comes as a separate survey suggested the drop in house prices last month left the market at its weakest since 2009 amid plummeting mortgage approvals.

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.

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