House prices fell 0.5 percent month-on-month in July after a flat month in June, the Nationwide Building society reported today, as concerns about the impact of government austerity measures dampened demand. There was also a sizeable drop in the annual rate of house price inflation, which slowed to 6.6 percent this month, its lowest since December, from 8.7 percent in June. The month-on-month fall, the first since February, was larger than the 0.2 percent drop forecast by analysts, and took the price of an average house to 169,347 pounds. Nationwide said there was also evidence that the imbalance between supply and demand, which helped push prices up during 2009, was easing as sellers were encouraged back to the market by the abolition of home information packs