The financial services provider, part of the Lloyds Banking Group, said prices in October were 2.3% lower than at the end of 2009 on a seasonally adjusted basis (-1.2% unadjusted).
October's House Price Index shows the underlying pace of price growth has turned moderately negative in recent months. The rate of decline, however, is significantly lower than the quarterly rate of decline of -5% to -6% during the second half of 2008.
Commenting, Martin Ellis, housing economist, said: "Prices in the three months to October were 1.2% lower than in the preceding three months. This measure gives a better indication of the underlying trend in house prices than the monthly changes.
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"There has been a very mixed picture of monthly house price rises and falls throughout 2010, which continued in October with prices rising by 1.8% following September's decline, reflective of flat house prices," she continued.
"The rate of decline in prices on the three month-on-three month measure is markedly less than the quarterly declines of more than 5% recorded during the second half of 2008.
"An increase in the number of properties available for sale in recent months, together with a decline in demand, has put some downward pressure on prices in recent months. We do not believe that prices are set to fall sharply over a sustained period.
"Interest rates are likely to remain very low for an extended period, which will continue to support the improved mortgage affordability position for homeowners. Low rates and stable employment levels are benefiting homeowners," she said.
The average home cost £164,919, according to the survey.
(GK)
