Average prices showed a monthly fall of 0.1%, the same decline as July and August, Hometrack found.

The study said house prices will remain under a “slow, downward pressure”, but the scale of falls will be limited in the short term by a reduction in the numbers of homes coming on the market.

The research also showed that demand has fallen for the last four consecutive months with September registering the largest fall at -3.6%. This is in contrast to the start of the year when between February and May the number of people registering with agents rose by 25%.

No region across England and Wales saw house prices increase in September, and the North West saw the biggest fall, with a 0.3% drop.

Prices remained static in London and the South West, fell by 0.1% in the East Midlands, the North East and the South East, and dropped by 0.2% in East Anglia, the West Midlands, Yorkshire and Humberside and Wales.

A Bank of England survey of lenders revealed last week that 13 financial institutions have joined the £80bn Funding for Lending scheme, which has has helped to increase mortgage availability.

Richard Donnell, director of research at Hometrack, said:

“While the Government’s Funding for Lending scheme is likely to support a modest increase in mortgage lending, the uncertain economic outlook, together with affordability pressures, will continue to act as a drag on housing market activity.

“Pricing will remain under slow, downward pressure but the tightening of supply will limit the scale of price falls in the short term.”