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Survey of estate agents show UK property prices down this month

However the figures from property analysts Hometrack show price falls that are lower than those based on mortgage data from lenders like Halifax and Nationwide whose figures show a decline of 20% since their peak in mid 2007.

Hometrack said that buyers are cautious and it is predicting that property prices will fall another 10% this year.

'Purchasers remain few in number and cautious. Some agents have reported potential buyers extending rental contracts for another six months to sit out the current uncertainty,' said Richard Donnell, Hometrack's director of research.

Overall its survey of 5,800 agents shows that house prices have fallen 10.2% from their peak in August 2007 after 16 straight months of decline. Last week the UK government pledged a second bailout package for British banks in a bid to spur lending and Hometrack said that need to kick in before the property market will improve.

'The market is at the mercy of the economy. The short-term prospects for the economy and levels of unemployment are at the forefront of most consumers' minds and these will be key to the performance of the housing market over 2009,' Donnell added.

The one bright spot in the Hometrack data was that house price falls are becoming less widespread, with agents reporting drops in only 58% of postcode areas in January compared to 63% in December and 75% in October.

But the data was otherwise grim, with the length of time to sell a house rising to 12.3 weeks from 12 weeks and the percentage of asking price achieved slipping to 88.3% from 88.9%.

Sales volumes, new buyers and new property listings also fell sharply, with no sign that the government's multi-billion pound bank bailouts have enticed them to lend to property buyers.