By Jason Theodorou

The average price of a UK property fell by 0.5% to £169,347 between the months of June and July, according to the Nationwide Building Society. Householder numbers dropped due to concerns about chancellor George Osborne's spending cuts.

Nationwide said that prices were down from June's figure of 8.7%, standing at 6.6%. It said that the number of properties being bought or sold across the UK was now around 50% of the level seen before the economic crisis.

The abolition of Home Information Packs (HIPs) has also encouraged more people to sell, with supply now far higher than demand. Nationwide said that the number of completed home sales was running at around 50% of the level seen before the onset of the credit crunch.

Martin Gahbauer, Nationwide's chief economist, said: 'At the moment, the market is clearly easing relative to the very tight supply conditions that characterised it since early 2009'.

'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'.

'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'.

Banks and building societies are rationing their mortgage lending after the impact of the credit crunch in 2007 and 2008. After the spring of 2009, prices have risen higher, partly due to a shortage of homes put onto the market.