There is no evidence house prices are approaching a floor following the latest report from the Department of Communities and Local Government (CLG).
Analyst firm Capital Economics says as unemployment continues to rise and mortgage credit remains rationed, all regions will see substantial further falls during 2009.
According to figures released by the CLG, house prices fell by 2.3% during December. The average home now costs £195,317 compared with £219,591 in the same month in 2007.
House prices fell across the UK in 2008, with prices in England dropping by 10.4%. Only Scotland saw a single digit drop, falling by 6%.
The Liberal Democrats responded to the figures by calling on the Government to capitalise on the opportunity to rebuild social housing by buying up land now "while it is cheap."
Sarah Teather, Shadow Housing Minister for the Liberal Democrats, said the results marked more worrying news for homeowners as house prices continued to fall through the floor.
She added: "But there isn't even a silver lining for potential first time buyers as they face sky-high mortgage costs, leaving the dream of a first home as far away as ever. The Government must make the most of this opportunity to rebuild social housing by buying up land now while it is cheap."IFAonline
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