Figures recently released by the Bank of England show that the number of new mortgages approved for house purchase hit an all-time low during March of just 64,000, 44 per cent fewer than during the same month of 2007.

At the same time, the housing market is coming under pressure from the credit crunch, with higher mortgage costs and lenders' more conservative lending strategy further limiting people's ability to get on to the property ladder or trade up it.

The lack of activity in the housing market is leading to a depreciation in house prices with homeowners struggling to sell their properties for asking prices.

Properties have now lost 4.2 per cent of their value since the beginning of 2008, with prices falling during six of the past eight months, according to Halifax.

The annual rate of price growth also turned negative during April for the first time since February 1996, with house prices now 0.9 per cent lower than they were in April 2007.

The latest gloomy data on the housing market comes just days after Nationwide Building Society said prices fell for the six month in a row during April, losing 1.1 per cent of their value, while the market also recorded its first year-on-year price falls since 1996.