The average house is now worth less than it was a year ago, down by around 1 per cent according to three house price indices produced by Halifax, Nationwide Building Society and Hometrack. Looking ahead, last week Lloyds TSB predicted a 10 per cent reduction in house prices from 2008 to 2009.

The falls come after recent years of soaring property prices, which have left many households sitting on a comfortable cushion of equity.

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