By Christina Fincher and Matt Falloon

LONDON (Reuters) - House prices crumbled at record rates and consumer confidence hit historic lows, data showed on Thursday, fuelling fears that a consumer-led slowdown could tip the economy into recession.

The Nationwide building society said house prices fell by 1.7 percent this month, leaving them 8.1 percent lower than a year ago -- the biggest annual fall since the monthly series began in January 1991.

House prices have now fallen by nine percent in the past nine months, an even sharper fall than during the property crash of the early 1990s.

The combination of falling house prices and rising household bills is weighing increasingly heavily on consumer morale. The GFK NOP consumer confidence index fell five points in July to -39, the lowest reading since the survey began in 1974.

The figures flag the threat of a sharp consumer retrenchment ahead and the uphill struggle facing Prime Minister Gordon Brown if he is to regain public support before the next election, expected in 2010.

"The combination of weaker consumer confidence and sharply slowing house prices will take its toll on consumer spending and the broader economy throughout the remainder of this year," said George Buckley, chief UK economist at Deutsche Bank.

ANY RATE RELIEF?

Consumers have plenty of reasons to feel glum -- rising unemployment, muted wage growth, a sharply slowing economy and the highest inflation rate in more than a decade.