The new average house price represents a two per cent fall compared to January’s figures, but a decline of 16.6 per cent compared to February 2008.

Following 21 months of uninterrupted increases in the average value of properties between December 2005 and August 2007, February’s fall indicates that house prices have now fallen for 18 consecutive months.

The Land Registry’s latest data on house sales from December shows a decline of 55 per cent year-on-year, falling from 81,300 in December 2007 to 36,341 at the end of 2008.

Commenting on the latest Land Registry house price figures, Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors (RICS), said:

“The 2 per cent drop in house prices in February according to the Land Registry brings the peak to trough decline in prices to almost 17 per cent.

“This is broadly consistent with what is being suggested by most other house prices indices.”

But, he added, the lower prices and cheaper cost of borrowing has begun to fuel an increase in buyer interest, which was reflected in RICS ‘new buyer enquiries’ series, showing a rise for four consecutive months.

“This turnaround in the appetite of potential house purchasers is now becoming more visible in actual transaction data and confirms that the increased number of people registering with estate agents are doing more than just window shopping,” Mr Rubinsohn continued.

“Land Registry numbers show sales edged up in December from the November low and the more timely mortgage approvals figures indicate this more positive trend has further to run over the coming months although activity will still remain at relatively depressed levels.”

© Fair Investment Company Ltd