More evidence of weakness in the housing market has emerged, with the building society Nationwide saying that UK house prices fell by 0.5% in July.

An average house was worth £169,347 in July, down from £170,111 the previous month, the Nationwide said. House prices in June were flat from the previous month.

Nationwide's chief economist Martin Gahbauer said that demand from home buyers remains subdued.

'A combination of restrictive credit conditions and uncertainty about the future economic outlook continues to limit the pool of buyers to those with relatively large financial resources,' he said.

'Many potential buyers still lack the confidence to purchase their first home or trade up when faced with uncertainty over future income and employment prospects.'

The Nationwide data is the latest of a series of figures demonstrating weakness in the housing market. Earlier this week house price data group Hometrack reported 0.1% fall in prices in July and last week a survey by the property group Rightmove said average asking prices for a home in England and Wales fell by 0.6% to £236,332 in the four weeks to 10 July.

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