Halifax has found house prices were still falling in July, although at a slower rate – just 1.7% compared with falls of 2.5% in May and 1.9% in June. The UK average house price is still one third higher than five years ago, says the report.

The data also points out that a solid labour market, low interest rates, and a shortage of new houses continue to support the market: ‘The labour market is the key driver of the housing market and the number of people n employment is at a record high,’ Halifax says.

Although it admits house prices are back to the level of June 2006, the lender is determined to be upbeat. Others, however, are not so confident. Seema Shah from Capital Economics said: ‘Another dire set of numbers from the housing market means that, to date, the correction has wiped out the last two years’ gains in average house prices.

‘Unfortunately, with the housing market still plagued by tight lending criteria, falling buyer confidence and now a rapidly weakening economy, the end for this housing market correction remains a long way off.’