House prices fell by 1.5 per cent last month, wiping about £2,500 off the value of an average home, official figures show.

This was the fourteenth consecutive monthly fall, pushing the average price down to £165,529, according to the Land Registry. The 10.1 per cent annual decline in prices is the biggest since the series begin in 1995.

Economists gave warning that there were further falls to come as the economic downturn continued. Howard Archer, of IHS Global Insight, the economic consultancy, said: “Ongoing very tight credit conditions, recession, faster-rising unemploy-ment and muted income growth form a powerful set of negative factors weighing down on the housing market.”

Homeowners in Wales were hit worst in October, with the value of the average home falling by 2.8 per cent. Those living in Conwy have seen values fall by an average of 12.4 per cent over the past year, while for those in Merthyr Tydfil prices fell by 5.1per cent last month alone. Properties in the West Midlands held up better, losing an average of 0.6 per cent in value last month, the Land Registry said.

However, those living in Neath-Port Talbot and on Anglesey bucked the trend, with the value of their homes rising by 0.3 per cent and 3.1 per cent respectively last month. Prices in both areas are 1 per cent higher than they were in October last year.

Owners of terraced properties fared the best last month, losing only 0.6 per cent of the value of their homes, but those living in flats and semi-detached properties have seen values fall by an average of 2.2 per cent during the month.

The average price of a detached home has fallen to £253,719, while the average price of a maisonette or flat is now £154,491, according to the Land Registry. The figures show the actual prices paid for property, whereas

other surveys, such as those from Halifax or Nationwide, are based on mortgage approvals. Figures from the Nationwide that were released this week showed house prices had fallen by 14.6 per cent over the past 12 months.

The malaise in the housing market was further underlined by a slump in home sales during the summer. The number of housing transactions fell to 45,437 in August, the lowest number since the Land Registry series began. Housing industry specialists said that the activity was dampened as buyers waited to see if the Government would be offering some relief on stamp duty.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: “Transaction data relating to the month of August plumbed a new low - a trend that was almost certainly exacerbated by the speculation surrounding the possibility of a stamp duty holiday.”

The Government announced a one-year holiday on the 1 per cent stamp duty payable on properties valued at between £125,000 and £175,000 at the beginning of September, after months of speculation.

More recent figures from HM Revenue and Customs show that housing activity picked up marginally in September and last month, but the number of sales still remains near historic lows.

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