House prices falling as West Midlands sees 3.2pc drop

House prices in the West Midlands and across the country have both fallen as the market shows further signs of deterioration, official figures show.

The Land Registry said the average price of a house fell 1.3 per cent to £160,384 last month compared to the same period a year ago, although the figure was unchanged from November.

In the West Midlands, a 3.2 per cent drop in prices has been recorded in the year ending in December, to give an average house price of £129,082.

Nationally, the average price for a detached house in December 2011 was £252,118, while semi-detached properties cost an average of £253,032.

The average for terraced houses and flats was £121,406 and £149,026, respectively.

The Land Registry also revealed a six per cent decline in completions in October, the most recent month for which figures are available.

There was a 10 per cent fall in the number of million-pound properties sold. The figures will fuel fears that the weak state of the economy and banks lending less money were hurting the market. London, which has been supported by strong demand from overseas buyers, was the only part of the UK to avoid an annual decline in prices, with a rise of 2.8 per cent to £345,298.

Howard Archer, at IHS Global Insight, believes prices will fall five per cent in 2012 amid low wage growth, rising unemployment and "major concerns over the economic outlook". The figures come after a study by property analyst Hometrack revealed house prices have failed to record any monthly increase for a year and a half.