More than £100 a day was wiped off the value of a typical British home last year by the housing slump, with the average house price ending the year down by £37,178, or 18.9 per cent, the Halifax reported today.

The average house price plunged by another 2.2 per cent last month, or more than £3,500, ending the year on another bleak note with no end to the woes of the residential property market in sight, according to the nation’s biggest lender.

House prices are under intense pressure as expectations of a further crash in prices this year deter prospective buyers, and with the credit crunch keeping home loans expensive and increasingly hard to come by.

Martin Ellis, chief economist of the Halifax, said the market was set to remain under pressure this year from weak growth in earnings and the scarcity of mortgage finance.

However, Mr Ellis argued that the improving affordability of homes and waning pressure on households’ finances should help to limit the scale of this year’s fall in the market. He noted that, relative to earnings, house prices were now at their lowest levels for five and a half years.

The Halifax said that housing market activity also appeared to be stabilising, although at a low level. Estate agents reported the first increase in newly agreed home sales for 18 months during November, and the first rise in inquiries from prospective buyers since October 2006.

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive