House prices: biggest fall since 1983

Halifax has reported the biggest year-on-year fall in house prices since it began to keep records in 1983. The cost of the average home slumped by £20,000 between July 2007 and July 2008 - a fall of 11 per cent, the first ever double-digit decline. Even in the property slump of the late 1980s, prices did not fall so quickly.

The slump is yet more evidence that the country is entering a recession, and led analysts to warn that interest rates would have to be cut hard and fast if the economy was to recover. Yesterday, the Bank of England held the cost of borrowing at 5 per cent.

The average home was £177,351 last month; in July 2007, it was £199,084.