Halifax revealed this month that UK house prices dropped 3.6% in September, which is the biggest monthly drop since 1983 when figures were first compiled.

The group said a drop in demand caused by uncertainty in the economy combined with more properties on the market, forced prices down.

Martin Ellis, housing economist with Halifax, commented that it’s too early to predict that September's fall means the beginning of a continued period of declining house prices.

"This rate of decline is significantly slower than the quarterly changes of between minus 5% and minus 6% that were seen in the second half of 2008."

He said: "Earnings growth is expected to be very modest over the next year, tax rises are on the way and more people are putting their homes on the market. These will all be constraints on the market, dampening house prices."

The International Monetary Fund (IMF) commented that the UK's property market looks "worrisome". In its World Economic Outlook, the IMF said: ""What remains worrisome ... is that house prices are still high based on traditional valuation yardsticks, and policy support may not be enough to prevent further correction."

Concerns still remain about a double dip in the housing market, due to the uncertainty in the economy.

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