The average cost of a home in the UK slid by 0.9 per cent during the month to stand at £172,415, while annual house price inflation slumped to minus 6.3 per cent, the lowest level since December 1992.

The housing market downturn has now wiped 7.3 per cent, or £13,500, off the value of homes compared with their peak in October last year, with prices falling by 6.4 per cent since the beginning of 2008, according to Nationwide Building Society.

Nationwide said the pace of price falls had slowed "significantly" during June, following May's 2.5 per cent dive, adding that prices were still 4 per cent higher than two-years ago.

But figures from the Bank of England released yesterday showed that mortgage approvals for house purchases had slumped to a record low, suggesting there are further falls to come.

The Bank said just 42,000 new loans were approved for people moving during May, 28 per cent below April's level and 64 per cent down on the figure for the same month of 2007.