House prices fell by another 2.5 per cent in October as the property market continues to slow.

The annual rate of decline increased to 7.4 per cent during the year to the end of October, compared with a year-on-year drop of 5.1 per cent in September.

The figures came as the Royal Institution of Chartered Surveyors said the number of homes changing hands had sunk to a new record low.

All regions of the country are reporting price falls on an annual basis and the average UK property costs £203,539, according to Communities and Local Government.

Northern Ireland continues to see the steepest declines, with homes losing 20.5 per cent of their value during the year to the end of October, followed by the South West and East Midlands, where prices have dropped by 9.5 per cent.

Scotland has seen the lowest price falls, with values dropping by 4.5 per cent during the 12 months to the end of October, while in the North West prices have dropped by 5.6 per cent.

But interest in property has picked up, with the number of househunters rising for the first time in two years during November as interest rate cuts tempt potential buyers back to the market.

First time buyers typically paid 9.7 per cent less for their first home in October than they did a year earlier at £146,921.

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