In its latest house price index, it revealed that the average home cost 1.3% less in April than the same month a year ago when prices were still rising.
Robert Gardner, chief economist at Nationwide, noted that the three-month on three-month measure of house prices, considered a less volatile measure, showed a modest rise of 0.6%.
He said: “It is not unusual to see a pattern of modest monthly increases and decreases when the market is fairly static, as has been the case since last summer. There is still little evidence to suggest that price declines will accelerate in the months ahead.”
Gardner highlighted that although household budgets remain under pressure, labour market conditions have shown a modest improvement in recent months.
“Together with continued low interest rates, a gradual improvement in the labour market should help to provide support for housing demand, while limiting the number of forced sales. Nevertheless, a strong rebound in the market remains unlikely as the recovery is still expected to remain modest by historic standards.
“In our view, the most likely outcome is that house prices will continue to move sideways or drift modestly lower through 2011.”
Nicholas Ayre, a director of UK buying agents Home Fusion, said: “Given the state of demand, it’s certainly not surprising that prices have fallen again. In a climate of high unemployment, high living costs and, sooner rather than later, higher interest rates, the demand for property is understandably low.
“As ever, there are isolated spots around the country where the property market is healthier, and sought-after properties in London are still commanding good prices. But overall, from a UK perspective, the property market is still very much on the back foot.”