The average home will lose £8,000 or more of its value this year, experts say. Daily Telegraph

Research forecasts that house prices will drop by up to four per cent in 2008 — the first annual fall in 15 years.

The study says that Britain’s property market slipped into the 'danger zone' at the end of last year and that prices could fall not only in the next 12 months, but in subsequent years.

Figures from both Halifax and Nationwide have shown that house prices have fallen in recent months.

The new research shows that with disposable incomes squeezed by high inflation and debt costs, house prices have now moved beyond the level at which they can be classified as affordable.

The Daily Telegraph/ Lombard Street Research Housing Affordability Index shows that they are at their most overvalued since early 1991 — when prices were plunging, with hundreds of thousands of people having their homes repossessed.