The cost of a home in England and Wales dropped by 1.1 per cent during the month, to give an average house price of £161,400.

The annual rate of decline continued to increase to reach 8.1 per cent, up from 7.3 per cent in October, according to property intelligence group Hometrack.

Overall, house prices fell across 70 per cent of postcode districts, although this was a slight improvement on the previous month when values dropped in 74 per cent of areas.

Richard Donnell, director of research at Hometrack, said: "All of the indicators from the latest survey point to a continued fall in property prices in the short term.

"A weak economic outlook and limited availability of mortgages are set to keep prices under downward pressure in 2009.

"Despite this, transaction volumes may be close to bottoming out. The market has been stripped back to the bare bones and now comprises just a relatively small number of committed buyers able to access finance, and needs-based sellers who are having to become more realistic on pricing."

The group said this realism was reflected in a continued fall in the percentage of their asking price that homeowners were achieving, with this dropping to 88.9 per cent during the month, although the rate at which it is falling has begun to slow.

At the same time the number of viewings needed to sell a property has fallen from a recent high of 15 in July to 13.5 in November, while the average time a property takes to sell has dropped slightly to 11.8 weeks from 11.9 weeks.

But the number of new sales agreed remained broadly static during the month, and there was a further fall in new buyers registering with estate agents.

Mr Donnell said: "The real problem for the housing market remains on the demand side.

"The constrained availability of finance, particularly for those looking to move home and borrow in excess of 75 per cent of the value of a property, continues to act as a drag on demand."

On a regional basis, London has seen the biggest price fall during the past year, with homes in the capital losing 9.5 per cent of their value, while prices in East Anglia have dropped by 9 per cent.

Homes in East Anglia lost a further 1.6 per cent of their value during November, the biggest monthly fall recorded.

Properties in the North East fared better, with prices in the region dipping by 0.7 per cent.

The figures come days after Nationwide Building Society reported some rare good news for homeowners, when it said the rate at which house prices were falling eased during November.

It said prices dropped by just 0.4 per cent during the month, a considerable improvement on October's 1.3 per cent slide, while the annual rate of price falls also slowed to 13.9 per cent, compared with a year-on-year drop of 14.6 per cent a month earlier.

But economists warned that it was too early to talk about a recovery, due to rising unemployment and the continuing mortgage drought.

However, the Bank of England's Monetary Policy Committee is widely expected to cut interest rates again next week, which will provide some support for the market.