British house prices tumbled at a record 16.1 per cent in November, marking the sharpest drop in property values for a quarter of a century.
Figures released this morning by Halifax revealed that prices fell 2.6 per cent in November compared to October, and are now 16.1 per cent lower than in November 2007.
The year-on-year decline is deeper than falls recorded during the last recession in the early 1990s, and is the biggest drop since 1983.
The shock fall has emerged just hours before the Bank of England's Monetary Policy Commitee is expected cut the interest rate again, after last month reducing borrowing costs by 1.5 per cent to 3 per cent.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "Ongoing very tight credit conditions, still relatively stretched housing affordability on a number of measures, faster rising unemployment, muted income growth and widespread expectations that house prices form a powerful set of negative factors weighing down on the housing market."
The average price of a house in the UK is back to the July 2005 level of £163,445, but this is still 124 per cent higher - or £90,000 - than the figure in November 1998.
Mr Archer said Halifax's figures placed further, last-minute pressure on the Bank to deliver a large cut in rates today.
IHS Global Insight predicted that interest rates would fall as low as 0.5 per cent in the first half of New Year, and could be reduced even further.
But Mr Archer added that: "...it is highly questionable how much of further interest rate cuts by the Bank of England that mortgage lenders would pass on."