Average property prices have fallen by 8.1% over the last 12 months and are now at a level last seen in January 2006 according to Hometrack.

Overall conditions may remain weak, but the survey highlights the fact that there are hundreds of different housing markets each performing differently. In Wales for example two fifths of postcodes have an average time to sell in excess of 3 months, this compared to just 10% in the south East.

Similarly 22% of postcodes in Wales registered an achieved asking price lower than 85% (the average stands at 88.9%), this was followed by 14% of postcodes in the North East and just 4% in London.

On a regional basis the largest price falls over the last year have been seen in London (-9.5%) and East Anglia (-9%) where prices have fallen off a high base.

All these trends reflect the relative supply demand balance within local housing markets together with the buying power of households which in turn is linked to the structure of local economies.

Richard Donnell, Director Research, Hometrack said: “All the indicators from the latest survey point to a continued fall in property prices in the short term. A weak economic outlook and limited availability of mortgages are set to keep prices under downward pressure in 2009.

Despite this however, transaction volumes may be close to bottoming out. The market has been stripped back to a relatively small number of committed buyers able to access finance, and needs based sellers who are having to become realistic on pricing.”