House prices down by 0.8% - report

Annual house price inflation dropped to 9.5% during the month, its lowest level since November the previous year, according to the Department for Communities and Local Government.

The monthly fall, which left the average home in the UK costing £218,330, was driven by a 2.4% drop in the price of detached houses as well as a 0.9% fall in the cost of bungalows.

The latest figures add to the growing body of evidence that the housing market has now entered its long-awaited slowdown.

Most house price indexes have now reported drops in the cost of property on a monthly basis as the market responds to higher interest rates and stretched affordability among potential buyers.

Howard Archer, chief UK and European economist at Global Insight, said: "Even though the DCLG tends to provide lagging evidence on house prices as the office calculates its index at the time when mortgages are completed, the data strongly reinforce the overall evidence that the housing market lost significant momentum in the latter months of 2007."

But the recent house price falls are providing some much-needed relief for first-time buyers.

The DCLG figures showed that the average person getting on to the property ladder in November paid £165,230 for a first home, 0.9% less than in October.

Former owner-occupiers also paid 0.8% less in November than during the previous month, at an average of £244,380.

Only four regions of the UK saw an increase in annual house price inflation during November, with the North East seeing the biggest gain, with annual growth rising from 5.2% in the year to the end of October to 7.6% in November. Scotland, the East Midlands and the East saw more modest growth.