British house prices fell by a record 15 per cent in the year to October as the country's deteriorating economy wiped £30,000 off the value of an average UK home.

On a monthly basis, house prices fell by 2.2 per cent between September and October, according to Halifax, Britain's biggest mortgage lender.

The dismal figures have emerged just hours before the Bank of England is widely expected to cut interest rates by at least half a percentage point to 4 per cent, though some business leaders are hoping for a deeper one percentage point cut.

Banks are under growing pressure from the Government to pass on the interest rate cut to its mortgage customers after it emerged earlier this week that borrowers are still waiting to benefit from last month's reduction to borrowing costs.

On Tuesday, Lord Mandelson, the Business Secretary, strongly rebuked British banks for their failure to help customers by passing on lower interest rates.

Today's 15 per cent fall in house prices is the biggest annual decline since Halifax began keeping records in 1983 and is worse than the biggest drop in house prices that occurred during the last recession in the early 1990s.

The average house now costs £168,176, down from £197,698 in October last year.

Martin Ellis, Halifax's chief economist, said: "Housing market conditions remain challenging in the face of the significant pressures on householders' incomes and the reduction in the availability of mortgage finance since last summer."

"Prices are still falling and they're falling at a faster pace than we’ve seen before," Mr Ellis added.

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