But there are signs of stability, as September’s prices fell by 1.3%; the smallest drop in seven months.

The recent price falls have reduced the average price of a home to £172,108, almost back to the level it was at in January 2006 and more than £26,000 less than in September last year

For the quarter ending in September, they declined by 5.2% - just up on 5.1% in the second quarter - which suggests that the trend of decline may be stabilising.

Halifax chief economist, Martin Ellis said: ‘House prices declined by 1.3% in September.

‘The overall price decrease in the three months to September was very similar to that in the previous quarter, indicating that the trend rate of decline may be beginning to stabilise.’

But he added: ‘The ongoing pressures on householders' income, combined with the reduction in the availability of mortgage finance, however, mean that market conditions will remain challenging.’