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This follows last month's index, when Halifax reported a 2.5 per cent drop in house prices. (See story.)

According to the latest figures, on an annual basis, prices were 0.9 per cent lower in April than during the same month last year.

According to property economist at Capital Economics Seema Shah, the last time the UK saw two such large falls in consecutive months was during the depths of the housing market crash during the early 1990s.

Shah added that even those falls fell short of the declines seen in the past two months.

"What is most concerning, is that these house price falls have come with the economy only having registered a modest slowdown. Strong fundamentals, such as the still relatively healthy labour market, clearly aren’t providing much support for house prices.

"With the economy and labour market set to weaken further, our forecast for a 20 per cent fall in house prices by the end of 2009 is firmly on track," said Shah.

In its House Price Index, the Halifax is predicting a single digit percentage decline in UK house prices for 2008 with regional variations.

The lender added that Scotland would likely record modest price rises, while Wales and the West Midlands are expected to see falls above the national average.

Halifax said that the decline in prices is being driven by a squeeze on spending power and the rapid rise in house prices in the last few years.

However, Martin Ellis, chief economist at the Halifax, said price falls should be viewed in the context of the substantial price rises over recent years.

"UK prices nearly doubled 190 per cent over the ten years to August 2007," he said.