House prices could fall by as much as 20 per cent this year, according to a personal finance website.

Fool.co.uk is predicting a significant correction as mortgages become harder to obtain and demand from buyers slows.

This follows the latest Halifax house price survey, released yesterday, which showed a 2.5 per cent monthly fall in house prices.

"The abrupt monthly fall of 2.5 per cent underlines Fool.co.uk's position that the long overdue correction in house prices could see the value of the average home drop by as much as 20 per cent this year," said David Kuo, a spokesman for the website.

"According to Halifax, house prices rose 1.1 per cent based on quarterly year-on-year figures.

"But the reality is house prices fell 1.3 per cent on a monthly year-on-year basis. Fool.co.uk therefore urges mortgage payers to brace themselves for further falls."

A major correction such as this would be bad news for homeowners, especially those with very little equity in their homes.

With home insurance premiums having risen in some parts of the country following last summer's floods and other household bills also increasing, many households are already under real pressure.

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