House prices fall 1.3% in January

House prices have fallen a further 1.3 per cent in January, taking the annual decline to 16.6 per cent.

Nationwide said the price of a typical house fell again in January to £150,501, wiping over £30,000 from the value of the average home over the last 12 months.

The market is not going to improve until lending picks up, Britain's third-biggest lender added.

"Mortgage approvals for house purchase fell to a record low of 27,000 in November, and partial figures for December suggest there has only been a small improvement since then.

"House purchase approvals have historically been a good lead indicator of house price movements, and we would not expect to see a stabilisation of property prices until approvals recover significantly from current levels," said senior economist Martin Gahbauer.

Buyer enquiries have strengthened over the last few months as interest rates have fallen sharply, but these have not translated into sales, the lender said.

David Smith, senior partner, Dreweatt Neate estate agents, said: "While there are signs of interest in the market given the extent to which house prices and the base rate have fallen, this amounts to nothing in the absence of credit.

"Until the lenders start to lend, any interest on behalf of a large percentage of buyers is academic."