Nationwide's chief executive Graham Beale said: "Reducing prices will improve affordability, which should bring about a recovery in the first-time buyers' market."
"Rate cuts will help to minimise payment difficulties and alleviate payment shock."
The latest figures from the Royal Institution of Chartered Surveyors (Rics) show that average sales are continuing to fall with London estate agents the worst-affected with six sales last month compared to an average of 16 in the north-east.
Nationwide also reported that the number of repossessions it has seen in the last six months is 300, more than double the number in the same time period last year.
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