The rate of fall, which was the same as in August, has remained relatively unchanged in the past three months.
But the annual fall was at its sharpest for 17 years.
"Casting back one year, there have been some astonishing and unpredictable developments in the housing and financial markets," said Fionnuala Earley, Nationwide's chief economist.
But she added that in the long-term there was no reason why house prices would not continue to grow in real terms even though there was a "sharp correction" now.
How long the correction lasts and how deep the fall in prices is depends largely on sentiment, as well as an end to the turmoil in the financial markets, she says.
Her analysis comes shortly after the Council of Mortgage Lenders suggested that predicting the short term course of house prices was "futile".
The Nationwide has also released figures showing prices during the third quarter of the year in different areas of the UK.
A homeowner on being told to drop her original asking price
Ms Earley said that a distinctive feature of the July to September period was the accelerating fall in house prices in the south of England compared with the north.
Four of the six regions registering double-digit price declines were in the South, with East Anglia and the South West showing the biggest annual drops - both 11.4%.
Northern Ireland showed the steepest decline in house prices across the UK, which are now 29.8% lower than a year ago.
THE LOCATIONS LEAST AFFECTED BY THE DOWNTURN
Durham city: 2% annual rise. Average price £157,613
Edinburgh: 3% drop, £249,587
Oxford: 3% drop, £321,848
Canterbury: 4% fall, £215,608
But the price rises had been so rapid in recent years, that prices are now only back to the same level as the third quarter of 2006.
In Scotland, where house prices had risen in the second three months of the year, recorded a 5% drop between July and September compared with the previous three months. That was a bigger drop than the UK average of 4.6%.
Wales witnessed the smallest fall in prices compared with other areas of the UK, with a three-month on three-month fall of 1.9% in July to September.
"The latest fall-out in the property market is not altogether surprising given the turmoil in financial markets over the past month," said Simon Rubinsohn, chief economist of the Royal Institution of Chartered Surveyors (Rics).
"The recent increase in some mortgage rates and the continuing squeeze on the supply of loans suggests that further price falls are likely over the coming months."
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