The housing market will suffer another difficult year of low volume sales and further price falls, according to Savills which yesterday reported a full-year loss.

Savills said reduced access to mortgage finance led to a dramatic downturn in the residential market in 2008, causing the value of the average UK home to fall 16%.

The prime London market saw a slightly bigger fall of 18%, as City bonuses dried up.

Jeremy Helsby, chief executive, said buying interest had picked up recently as price falls work their way through the market, but a widespread recovery was dependent on the availability of mortgage finance and a more positive outlook for the economy.

'The residential market will take more pain this year,' he predicted.

Financial Times