Average house prices across the UK have been steadily declining throughout the year and according to a survey by Halifax consumers expect house prices to drop even more in the foreseeable future.

According to the survey, thirty percent of the people surveyed predicted a further decline in prices over the next twelve months while a quarter said that prices will not change in the coming year. All the while a house price expectations index by Halifax fell to -2 from this year’s highest value of +9 in April.

Halifax economist Martin Ellis commented: “It is unsurprising that confidence in the housing market has been shaken a little over the last few months given the increasing uncertainty about the current economic environment, together with pressure on householders’ finances,” and he added: “We expect little change in both prices and activity over the next few months.”

Forecasts on house prices by analysts have also been pessimistic, predicting house prices to drop by as much as 5% in 2012. The generally weakened economy combined with substantial fears that the economy could start shrinking again point to further decline in house prices over the next twelve months.

However, as residential property prices across the UK continue to fall, prime central London prices continue their steady climb. According to the Land Registry house prices in London have increased by 2.7% since September 2010 and are now at an all-time high.

Many observers question the stability of those inflated figures, especially at the top end of the market, while others argue that these figures reflect a growing tendency for buyers, both local and overseas, to purchase central London property as a long-term investment.