House prices in England and Wales are falling at their fastest rate since 1992, with the screech of brakes loudest in the capital as the market slams into reverse, according to the FT House Price Index.

Prices fell on average by 1.3% in August, according to the latest FT data. Year on year, prices were 2.2% below their levels in August 2007.

In London, prices which a year ago were growing at 18.6% annually, were down to 1.9% - still positive, but now moving at a snail's pace.

The decline in average house prices across England and Wales marks the sixth consecutive monthly fall in the index, in line with the general trend seen in other closely-watched indices of house prices from the nation's largest lenders.

The year-on-year decline shown by the FT Index, however, is far more modest than that suggested by other indices, some of which are now showing falls of 10% or more from their peak. According to the FT index, house prices peaked in February 2008 and are currently 4.0% below that level.

Financial Times