UK house prices dropped at their fastest annual rate for 14 years in July, according to Nationwide.
The building society said prices had dropped by 3.8% - the biggest yearly decline since July 2009.
Nationwide said mortgage interest rates remained high, making affordability a challenge for house-buyers.
Mortgage costs hit the highest level for 15 years in July as lenders faced uncertainty over the interest rate set by the Bank of England.
The average price of a home in the UK is £260,828, said Nationwide which is about £13,000 below a peak in August last year.
Many first-time buyers should welcome a drop in house prices, which have climbed in recent years, including during the Covid pandemic.
But Nationwide said that despite July's fall, higher mortgage rates meant housing affordability remained stretched.