The average cost of a home has now slumped by 4.4% during the past year, the fastest annual rate of decline since property consultants Hometrack first launched its index in 2001.

The survey also showed properties were on average taking 11 weeks to sell, up from 6.5 weeks in June 2007.

The proportion of the asking price being achieved fell to 90.9% from 91.6%, the lowest level since the survey began.

However separate research carried out for the National Housing Federation predicted that the property market will bounce back from its current slump, with house prices in England rising by 25% during the coming five years.

Despite fears of a housing market crash, the average house price in England will rise by 25% over the next five years to reach £274,700, the National Housing Federation has said.

The research by independent economists Oxford Economics forecasts that house prices will fall in 2009, start to recover in 2010, and then rapidly increase from 2011.

Federation chief executive David Orr said: "Our report shows that despite concerns about the current housing market downturn, house prices will increase substantially over the mid to long term.
 
"Demand for housing is going up, while the supply of new homes is going down. This means that as soon as the economic outlook improves house prices will resume their previous upward trajectory."