According to recently released Bank of England (BoE) figures the number of new mortgages approved has fallen 64% annually, which takes them below even the levels of the 90’s house price crash.

Howard Archer, chief UK economist at analysts Global Insight, said that this was:

“More very disturbing housing market data that add to already serious concerns over the likely depth and length of the housing market correction. Very low housing market activity seems certain to feed through to further depress already markedly weakening house prices.”

Global Insight has predicted that prices will fall 12% through both 2008 and 2009 before stabilising in 2010.  This would drop the average UK house price £40,000 to £152,700 by the end of 2009.

Nationwide Building Society will release June’s house price figures on July 1, and are expected to show a further decline in average values, as uncertainty grips the market and potential homebuyers struggle to raise finance.