New house prices in the West Midlands, London, the South-West and the North last month saw some of the worst falls in the country, it emerged yesterday.
Figures from new homes website SmartNewHomes.com showed that the average price of a new home was £255,327, a fall of 0.2 per cent on September and down 2.4 per cent compared with October, 2004.
In the West Midlands the average price of a new home was £242,028, a fall of one per cent over September and 10.5 per cent compared with October last year.
SmartNewHomes.com also said that the West Midlands was the least popular location for new house buyers.
A more optimistic picture for the housing market was painted by Propertyfinder.com, which yesterday forecast a rise in house prices next year.
The firm said that 54 per cent of respondents in its survey expected prices to rise by half a per cent over the next 12 months.
This renewed confidence is reflected in part by homebuyers' willingness to stretch themselves a little bit more in order to borrow enough to afford the property they wish to purchase.
According to the firm, people are now borrowing on average
58.5 per cent of the value of the property, up from just 54 per cent at the beginning of the year.
Jim Buckle, managing director of propertyfinder.com, said: "Homebuyer confidence definitely took a bit of a pasting earlier this year, and this fed through into negative sentiment on future house prices and a cautious approach to how much people borrow.
"The consequence was that the number of transactions fell sharply. Now we're seeing a reversal of that trend.
"Confidence is on a rising trend into this autumn compared to a sharply falling trend this time last year.
"This renewed upwards momentum, combined with the expectation that the financial services industry will be paying big bonuses this year, heralds a strengthening of the housing market into the new year."
He added: "At a time when homebuyer confidence is running high, a cut in rates could be just what the doctor ordered to spur the market forward.
"We don't expect rates to be cut this week, and home buyers are clearly not banking on one, but still think there is a strong likelihood that the MPC will act to lower the cost of borrowing early in the new year."
Meanwhile, new figures from the Land Registry showed that house prices in Wales rose significantly compared to other regions.
The July to September figures showed that house prices there rose by 7.42 per cent compared to the same period last year.
The average house price in England and Wales for the quarter was £194,589 an average rise of 3.52 per cent compared to the same period in 2004.
Wrekin in Shropshire saw the greatest reduction with house prices falling by 6.29 per cent.
In the West Midlands, the average price of a home during the quarter was £161,076, a rise of 1.18 per cent compared with last year's figure of £159,203.
All economic regions in England and Wales showed an increase in average prices.