Mortgage lending in the UK has slumped by 32% since this time last year. This has contributed to significant falls in house prics. House prices have now fallen by £17,000 since the start of the year. This represents almost a £100 decline in house prices per day during 2008.

It is estimated that the average house price  worth £187,500, will drop by  12.8 per cent, this year. However, the % fall is likely to be bigger for houses worth more than £200,000.

Falling House prices are a reaction to:

• Shortage of mortgage funds
• Falling demand due to economic slowdown and rising living costs
• Overvalued house in the 2000 boom
• Lack of confidence in the housing market
• Expectations of house price drops encouraging people to save and rent in short term.