House prices are falling at their fastest rate since the 1990s crash, Britain's biggest mortgage-lender Halifax has said.

The high street bank said prices shed 6.1 per cent of their value in the last year and have fallen by a total of 8.9 per cent so far since January.

Economists are predicting prices will drop by up to 12 per cent in 2008.

The average property price dropped by 2 per cent during June, following a slide of 2.5 per cent in May, to stand at £180,344.

Halifax said the average home now cost the same as in August 2006, although prices are still 2 per cent higher than two years ago and 40 per cent higher than five years ago.

The figures are in line with those reported by Nationwide Building Society last week which showed that house prices fell for the eighth month in a row during June, dropping by 0.9 per cent.

Meanwhile, a new report has said a couple on low incomes would have to save more than a year's worth of their take-home pay to get on the property ladder due to high house prices, large deposits demanded by lenders and high stamp duty levels.

The Royal Institution of Chartered Surveyors said the difficulties now faced by people getting on to the housing ladder are now only slightly below their worst ever level in the third quarter of 2004.

A couple with take-home pay of £27,516 a year would have to save an average of £27,738 to meet the upfront costs of buying a home during the second quarter of 2008, more than 100 per cent of their annual income, and well up on the low of 21 per cent of their pay needed in 1996.

And home-owners are unlikely to receive a boost from the Bank of England's Monetary Policy Committee in the near future.

The MPC, which announces the results of its two-day interest rate setting meeting later, is widely expected to keep the official cost of borrowing on hold at 5 per cent due to inflationary pressures.

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