Nationwide's house price index for December shows the market continues to slide as house prices dipped nationwide by 0.2% on average.
Annualised house price inflation, according to the index, has slipped to 12.7% - the lowest rate for almost three years the lender says.
The latest annualised rate is down from 15% in November.
However, despite the slowdown, prices are still three times their level of 1995, and with the average house nationwide costing £152,623 first time buyers are still finding it difficult to get on the property ladder.
And the rate of inflation through 2004 means the average property increased in value by £47 daily, making 2004 the fourth consecutive year of double digit house price inflation, according to Nationwide's figures.
This inflationary run has contributed to the year marking the third in a row the number of first time buyers has fallen - to just 349,000 for the whole of 2004 Nationwide estimates.
Although the second half of 2004 saw a rapid cooling off of the housing market, Nationwide forecasts single digit inflation next year of between 0% to 5% - probably about 2%.
Employment remains high and the cost of borrowing money low by historical standards, while the rate of new-build houses is still lagging demand overall, the lender says.IFAonline
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