Prices are now falling at their fastest ever annual rate, dropping 17.7% since February 2008, according to Halifax's measure, which compares the average price over three months with the same period last year.

As a result the average UK home is now worth £160,327, falling by more than £33,000 from £194,953

The lender said there were "tentative" signs that housing market activity was beginning to stabilise, but added 2009 would still be a difficult year.