House prices have fallen to levels last since in march 2005, according to the Land Registry’s monthly house price index (HPI) published today.

The average house price is now £156,753, down almost £28,000 on January 2008 and bringing the annual decrease to 15.1 per cent.

Property prices in January fell 0.8 per cent –the seventeenth consecutive monthly fall.

Wales experienced the most dramatic monthly price fall, decreasing 8.8 per cent, but this was due to the “exceptionally small” volume of sales recorded there in January.

Rolling average figures for Wales indicate a monthly one per cent fall, which is a more reliable indicator of the underlying trend.

The Land Registry figures show the average price in London fell 14.1 per cent.

Recorded sales volumes continuing to decrease, with the number of sales averaging 41,014 per month in the months August to November 2008. In the same period in 2007, the average was 106,495.

Seema Shah, property economist at Capital Economics, predicted the end to the housing market correction to be a distant prospect.

“The recession will deepen this year, triggering a further sharp rise in unemployment. Accordingly, while the availability of mortgage credit may increase, weak buyer demand will prevent a housing market recovery from materializing,” she said.

Ms Shah added all regional housing markets remain significantly overvalued and no no region would be immune to the impact of either the credit crunch or the economic recession.

“Ultimately, therefore, there is little reason to believe that house prices are approaching their floor in any part of the country. Indeed, we expect prices in all regions to fall by at least a further 15% this year, with continued declines in 2010.”

Land Registry data show Redcar and Cleveland experienced the strongest monthly growth in January with an increase of 3.8 per cent, while Caerphilly had the most significant monthly price fall during January, showing movement of -4.5 per cent.