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The Chesterton CEBR House Price Poll of Polls for November revealed the sharpest annual house price fall since the Poll began, with average residential house prices now 11.7 per cent lower than November 2007.

The average price of a residential property in England and Wales has dropped by 1.7 per cent on last month, to £174,371.

The survey, conducted for Chesterton by the Centre for Economics and Business Research (CEBR), found that house prices fell in all UK regions in November with the largest falls seen in London, the East of England and Northern Ireland.

London is now catching up with declines in the rest of the country, as prices fell 11.3 per cent year on year. Average house prices in London are now £38,700 lower than their peak in February this year. 

All levels of the market have been effected, and the research showed that prices in the top 20 per cent of the market fell by 9.9 per cent compared with a year ago, while the bottom 20 per cent of the market saw values drop by 12.2 per cent.

Terraced housing suffered the most in November, falling by 1.8 per cent month on month, however detached houses held their value the most with just a 1.1 per cent fall.

Douglas McWilliams, chief executive of CEBR, said: "The latest Chesterton's Poll of Polls shows the housing market downturn showing little sign of relenting with house prices 11.7 per cent lower than in November 2007.

"Interestingly, house price falls in London have gathered pace of late to now almost match the national trend, with a year on year decline of 11.3 per cent.

Robert Bartlett, CEO of Chesterton, added: "This month's Pre-Budget Report missed the point that any general economic recovery will be led by a revival of the property sector.

"If people believe their major asset, their home, is losing value, they will cut their spending elsewhere to conserve funds. Any hope of the property market stabilising depends on the government addressing the barriers to buying and selling property.

"First the base rate needs to fall further to allow the banks a margin to recapitalise as well as lend. The US has already realised this, which is why rates there have already hit 1 per cent.

"Next, stamp duty, now at a record high of 4 per cent for properties over £500,000, must be reduced. In this stringent financial climate the current rate is punitive."