House prices are dropping faster than ever recorded according to the UK's largest lender Halifax. The mortgage lender's latest property index has seen a 12.7% fall in the past year, the highest rate since records began in 1983. The mortgage lenders recorded a 1.8% fall last month, following a 1.7% fall in July, making it the sixth month in a row to report a fall of over 1.5%.

Halifax said the average price of a property is approximately £175,000, so in August alone that figure would have fallen by over £3000, bringing the average property in the UK below the government's recently raised stamp duty threshold.

These drops in figures are being repeated across rival lenders, one of which, Nationwide reported a 10.5% fall over the past 12 months

Halifax chief economist Martin Ellis, said: "The pressure on householders' income, together with the reduction in the availability of mortgage finance due to the global financial markets crisis, is resulting in both lower property prices and activity levels. This week's announcement on stamp duty is a welcome development and will benefit a significant number of homebuyers, particularly outside the South East of England. Market conditions, however, will remain challenging,"

This constant fall in house prices has deterred potential homebuyers to sit tight The recent raise of the stamp duty threshold has been welcomed by lenders and buyers, but experts predict the continued lack of mortgages will continue to reduce demand.