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According to research from Nationwide, prices dropped by 1.9 per cent during August as home owners and buyers continue to stay away from the market.
As a result, the number of homeowners renovating their properties with structures such as conservatories is likely to increase as they look to put off moving in favour of home improvement.
The average price of a house fell to £164,654 during the month, compared with £169,316 during July 2008.
On a yearly scale, prices were down by 10.5 per cent.
Fionnuala Earley, Nationwide chief economist, said that recent activity in the market had been minimal.
"Agents report an improvement in new buyer enquiries, perhaps stimulated by the recent falls in prices and the opportunity to negotiate a good deal. However, the reported numbers of sales have not been encouraging," she explained.
Research conducted by Sainsburys Bank in May found that 21 per cent of British homeowners had structural work planned for the next 12 months as they try to make the most of their current abode in the credit crunch era.