The average price of a home in the UK is now the same as it was in August 2004, figures from the Halifax have revealed.
House prices continued to fall in December with the average UK home now costing £159,896 - a level not seen since August 2004, according to the Halifax.
Prices dropped by 2.2 percent during the month, marking an annual fall of 16.2 percent, as the problems in the property market continue. The Halifax predicted that the downward trend would go on "over the coming months".
The firm's chief economist Martin Ellis claimed that this was down to two reasons: "continuing pressures" on people's income, along with "the negative impact of the dislocation of the financial markets" - namely the credit crunch - reducing mortgage availability. However, he believes that the downturn could be limited thanks to a variety of factors.
"Improving housing affordability and an easing in the pressure on the majority of households' finances should support market activity and prices," said Mr Ellis. "The house price to earnings ratio - a key affordability measure - is at its lowest for five and a half years."
This ratio was at an estimated 4.44 in December, the Halifax said, down 24 percent from a high of 5.84 in July 2007. Additionally, the proportion of local authorities where first-time buyers can find affordable housing trebled over the course of last year.
