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The latest survey from Nationwide found that the average price of a house now costs £158,872 - a fall of nearly £30,000.
This month alone, property prices have fallen 1.4 per cent.
Fionnuala Earley, Nationwide's chief economist, said the ascendant trajectory of prices has been driven by the 34-year low in transactions.
"A looming recession and continued financial market instability have uncomfortable implications for the housing and mortgage markets and will undoubtedly affect the pace of recovery in house prices," she commented.
Experts believe house prices will continue to fall in the forseeable future as the prospect of a recession looms, reports the Guardian.
Last month, the UK's economy shrank by 0.5 per cent and is expected to continue shrinking into 2009.
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