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U.K. home values fell for a third month in January, the longest stretch of declines since 2000, and the housing market will cool further as demand from property investors wanes, Nationwide Building Society said.

Prices declined 0.1 percent from December, when they dropped 0.4 percent to 180,473 pounds ($359,000), Britain’s fourth- biggest mortgage lender, said today. From a year earlier, values rose 4.2 percent, the least in two years.

Home-loan approvals fell to the lowest in at least nine years last month as higher borrowing costs and a curb on lending helped drag out the worst housing slump for more than a decade. A slower market will go “hand in hand” with weaker consumer spending, Bank of England Governor Mervyn King said last week.

The mortgage data “undoubtedly signals a continued cooling in annual house-price inflation,” Martin Gahbauer, a senior economist at Nationwide, said in a statement. “New demand from buy-to-let investors is likely to weaken in 2008.”

Consumers, already burdened with record 1.4 trillion pounds of debt, face higher costs for loans after banks around the globe posted at least $133 billion in losses from the collapse of the U.S. subprime mortgage market.