House prices fell by 0.3 per cent this month as the market continued to soften following a year of heavy internal and external pressures, Hometrack has said.

The property research firm has revealed that this fall - the largest monthly drop recorded by its index for almost three years - was accompanied by an increase in the average amount of time it takes to sell a home.

That has increased to 8.3 weeks on average, the highest level since the study began in 2001, the report noted.

"Despite the recent cut in interest rates, levels of market activity are likely to remain subdued over the course of 2008," commented Richard Donnell, director of research at Hometrack.

"A weak outlook for prices and continued uncertainty among sellers creates the potential for a major lack of housing coming to the market in the first quarter of the year," Mr Donnell continued.

Earlier this month the Council of Mortgage Lenders advised that 2008 would be a double-edged sword for buyers, suggesting that uncertainty would also be a common theme for those looking to purchase property next year.

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