House prices in England and Wales have fallen by 0.4 per cent in December and by 0.3 per cent in the West Midlands as the market continues to stutter.
The drop, which pushed the average cost of a home down to £184,469, was the first decline recorded by the Land Registry since August 2005.
There is now little doubt that the housing market is slowing down, with all the major indexes reporting price falls on a monthly basis.
The question remains as to how steep any correction will be, with some groups expecting prices to stagnate this year, while others are predicting drops of up to five per cent.
The Land Registry said annual house price inflation had continued to ease during the month, falling from 8.1 per cent in November to 6.7 per cent in December. "This month's data provides evidence of a downward trend in house prices," the government body said.
"Although the annual growth rate remains positive, this month's price fall is a clear indication of a weakening market."
Prices fell across all regions of England and Wales during the month, apart from in the North East, the East and London.
The North East saw a relatively strong jump in prices of 2.2 per cent, while in the East they rose by 1.1 per cent and by 0.6 per cent in London.
But at the other end of the scale the East Midlands saw a 3.3 per cent slide in the cost of property while the West Midlands witnessed a more modest fall of 0.3 per cent.
Prices fell by 2.1 per cent in Wales, 1.3 per cent in the South East, one per cent in the South West and 0.9 per cent in the North West.
The number of homes changing hands is also continuing to fall, with an average of 103,374 properties sold each month between July and October, nearly 12 per cent below the same period of 2006.
But despite price falls, the number of homes in England and Wales sold for more than £1 million rose by 31 per cent between October 2006 and October 2007 to 671 - the equivalent of nearly 22 a day. The average house price in the West Midlands is now £154,470.