UK house prices saw an annual fall of 0.9% in April, according to The Halifax - the UK's biggest mortgage lender.
It also said that prices dropped by 1.3% in April compared with the previous month.
The price of the average home is down to £189,027 and the lender said it now expected a "mid-single-digit" percentage decline in prices in 2008.
Halifax's chief economist, Martin Ellis, said the decline in prices was driven by a squeeze on consumers' spending power and the rapid rise in house prices in the last few years.
'Completed property sales in March were down 20% on an annual basis,' he told the BBC.
'The number of new buyers interested in home purchase fell for the sixteenth successive month in March, highlighting the decline in housing demand,' he added.
According to the Halifax's figures, prices have fallen by 4.2% in the first four months of the year.
If that rate of decline continues for the rest of 2008 then the annual fall in prices will be nearly 13% by the end of the year.
The Halifax said it expects bigger falls in Wales and the West Midlands, with Scotland bucking the trend with a modest rise.
