House prices have plummeted by more than 10% in a year

The property market faces a full-scale collapse with house prices tumbling by more than 10 per cent a year for the first time since 1990.

The average price has fallen by 10.5 per cent over the past 12 months, wiping about £30,000 off the value of a typical London home, according to the Nationwide building society.

The last time that house price falls were measured in double digits was in the autumn of 1990 during the depths of the last recession, when it took six years for values to recover.

The figures confirm there is still no sign of an easing of the credit crunch almost a year on from the collapse of Northern Rock.

A leading City forecaster is now predicting a full-blown recession for the British economy next year.

Capital Economics said GDP will fall by 0.2 per cent, which would be the first full-year drop in national income since 1991.

Officially, the Government is still predicting growth of at least 2.25 per cent next year.

Another bleak set of financial results from leading companies this morning added to the growing mood of gloom as the City continued its return to work after the summer break.

Property agents and consultants Savills said its profits fell more than 40 per cent to £19.2 million in the first half of the year and warned that there was "no sign of improvement" in the financial markets.

Chief executive Jeremy Helsby said he expects property prices to fall 25 per cent between January this year and December next year.

But he added: "The good news is that in 2012, in London and the South-East, prices will recover to the levels they were in 2007."

Car dealer Pendragon said its firsthalf profits dropped 60 per cent from £33.5 million to £13.4 million and the number of cars it sold to private buyers fell eight per cent in the second quarter.

Chief executive Trevor Finn also said there had been "unexpected and significant" falls in second-hand car prices over the summer because of the lack of buyers and warned there would be no recovery until the end of next year.

Nationwide's figures showed that house prices fell by almost two per cent in August alone, the 10th consecutive monthly fall.

The building society ' s chief economist Fionnuala Earley said: 'Recent activity levels in the housing market remain very subdued.

'House builders in particular have been reporting significant reductions in site visits and reservations of new properties since this time last year, in spite of a big increase in the use of sales incentives.'

With estate agents around the country reporting very few enquiries from prospective buyers over the summer there is little hope that there will be a September bounce this year.

Nicholas Leeming, a director at online agents propertyfinder.com, said: "August as exceptionally quiet and July was also very quiet.

There is likely to be an early shut down of the market for Christmas, so November will be dead as well as December. In any down period the quiet times come early."

The stream of bad economic news has made a mockery of predictions that the credit crunch, which flared up in the US last summer, would end