UK house prices have fallen at a record rate during the year to the end of September, according to Britain's biggest mortgage lender.

The Halifax attributed the fall - which has seen house prices lose 13.2% of their value - as the biggest ever recorded by its house price index.

The drop means the annual fall now stands at 12.4%, with the cost of the average home in the UK now at £172,108.

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Annual house price inflation, which measures prices during the previous three months compared with the same period a year ago, also dropped to a new record low.

Martin Ellis, chief economist at the Halifax, said: "House prices declined by 1.3% in September. The overall price decrease in the three months to September was very similar to that in the previous quarter, indicating that the trend rate of decline may be beginning to stabilise.

"The ongoing pressures on householders’ income, combined with the reduction in the availability of mortgage finance, however, mean that market conditions will remain challenging."

(JM/KMcA)