Britain's biggest lender, Halifax, now claims that the average house price is six per cent lower than it was last year.
The average property cost just over £180,000 in June, new figures from Halifax show.
Britain's biggest mortgage lender said today that prices dropped by a further two per cent last month, meaning that they have declined by 6.1 per cent since June 2007. This also means that the average house price now stands at the same level as it did in August 2006.
The tighter restrictions being placed on borrowers due to the credit crunch, the rise in food and fuel costs and a general decline in consumer spending power have all exerted downwards pressure on the UK property market.
However, Halifax chief economist Martin Ellis added that he remained upbeat over the sector's prospects, due to its strong fundamentals. "A strong labour market, low interest rates and a shortage of new houses underpin housing valuations," he said.
"We expect the UK economy to slow further in 2008, with a further rise in unemployment and low interest rates."
Last week, rival lender Nationwide released new house price data tracking a 0.9 per cent drop over June. The firm also claims that prices now stand at 6.3 per cent lower than they did 12 months ago, after eight consecutive monthly declines.
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