Average price of a house is now £162,096, falling 3.6% last month.

House prices in the UK fell 3.6 per cent last month, according to the Halifax survey, marking the biggest monthly fall on record.The average price of a house is now £162,096.

This has increased the fear of a housing market crash in the fragile British economy, which is awaiting the Government's Comprehensive Spending Review that could result in extensive cuts to public spending and the loss of thousands of public sector jobs.

However, Halifax downplayed the significance of the record figure saying quarterly figures, rather than monthly measurements, provide a better assessment of underlying trends.House prices in the third quarter of 2010 were 0.9 per cent lower than in the second quarter of 2010, said Halifax's chief economist Martin Ellis.

According to him, it is too early to conclude that September's fall marks the beginning of a sustained period of declining house prices. Reports note that the survey's finding of the record decline has come just a day after the International Monetary Fund warned that UK house prices remained too high and could fall.