Prices are dropping on average by £94.87 a day – a decline of 17.7 per cent in the past year, according to Halifax.

The annual drop, which is based on the group’s preferred measure of comparing prices during the previous three months with the same period a year earlier, is the largest since the lender began its records in 1983.

The 2.3 per cent drop in February wiped out the 2 per cent rise in January and leaves the average home in the UK now costing £160,327, it said.

The figures come on the back of a separate report showing that the credit crisis has triggered property price falls in nearly every housing market across the world, with the UK seeing the second worst fall.

Around 81 per cent of countries recorded falls in the value of property in the last three months of 2008, compared with just 27 per cent in 2007, according to estate agents Knight Frank.

The group said no market would escape unscathed from the global financial crisis, although the impact would vary according to the housing markets and underlying economies of individual countries.

It said house prices fell by 14.7 per cent in the UK during 2008, with 5.1 per cent of the slide coming during the final quarter of the year.

Dubai was the strongest performer during 2008, with house prices rising nearly 60 per cent during the year, but much of this gain is expected to be wiped out in 2009.

And at the other end of the scale, Latvia saw the steepest price slides, with homes dropping by 16 per cent in the final three months of the year and by 33.5 per cent during 2008.

Iceland also suffered badly, with prices falling by 14 per cent during the year, with 11.3 per cent of the slide coming in the final quarter following the collapse of its banking sector.

Economists and mortgage experts said UK house prices are likely to continue falling in the coming months. The latest Halifax figures revealed that the average price of a home is now £34,626 lower than a year ago.

Martin Ellis, housing economist at Halifax, said: “Continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are likely to mean that 2009 will be another difficult year for the housing market.”

Melanie Bien, of mortgage brokers Savills Private Finance, said: “There is still more pain to come for home owners and it will be a few more months yet before we hit the bottom of the market.” (Via Telegraph)