The first evidence that the average home is worth less than it was a year ago is disclosed in a report today, sparking fears that hundreds of thousands of homeowners could be plunged into negative equity. Daily Telegraph, Financial Times

The average residential property is now worth £173,100 – £1,500 less than a year ago, claims Hometrack, the property research company.

The 0.9% slump is 'highly symbolic', say industry analysts, because it is the first time since the credit crisis began that any property index has shown house prices falling on an annual basis.

Homes are now taking a record length of time to sell, with the average property staying on the market for 9.1 weeks before it is sold. Sellers are taking a seven per cent cut in their asking price.

The data from Hometrack is the firmest indicator yet that the 13-year house price bubble has burst, as the turmoil in the mortgage market makes buying property increasingly difficult for many people.