Sharp fall for house prices

House prices suffered their biggest annual fall in 15 years in April, the country's biggest mortgage-lender HBOS has said.

The weak figures, which show prices fell 1.3 per cent on the month to £189,027, raise fears of a deepening economic downturn this year.

The figures come after Bank of England policymaker David Blanchflower warned prices could fall by more than 30 per cent and add to the woes of Prime Minister Gordon Brown, whose party has suffered a drubbing in local elections.

Mr Blanchflower has predicted the economy could fall into a recession and house prices dive unless policymakers act immediately to shore up growth.

And Howard Archer, economist at Global Insight, said: "We expect house prices to fall by 7 per cent and 9 per cent in 2009."

A further cut in interest rates is expected by most analysts in June after have already reduced borrowing costs three times since December.

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