The average UK house price was 2.1 lower in December 2011 than the same month in 2010, according to housing research firm Hometrack.
The fall in December 2011 was sharper than the 1.6 per cent drop seen in December 2010 compared with 2009, according to the figures.
Month on month, the average house price was down 0.2 per cent in December, with 78 per cent of UK postcodes registering price falls. In London however, 43 per cent of postcodes saw house prices rise.
Hometrack director of research Richard Donnell said: “The strength of the London market, where prices are up 1 per cent and by more than 5 per cent in Central London, has flattered the national picture. Strong international and domestic demand saw prices in the more affluent parts of the capital rise over 2011.”
New buyer registrations across the UK fell by 6.3 per cent in December 2011, compared to just a 2.2 per cent fall in November. Hometrack said it expected house prices to fall by 3 per cent by December 2012, though rental values will rise by 2 per cent over the next 12 months.