Britain saw some of the steepest house price falls in the world last year, collapsing by 14.7 per cent, with only Latvia performing worse, research showed yesterday.
More than three-quarters of the 42 countries surveyed recorded falls in the value of property in the final quarter of 2008, compared with just 27 per cent in 2007.
Dubai was the strongest performer, with house prices soaring by nearly 60 per cent in 2008, but much of this gain is expected to be wiped out this year.
Latvia saw the steepest slides on an annual and quarterly basis, with prices dropping by 16 per cent in the final quarter of the year and by 33.5 per cent during the whole of 2008.
Iceland also suffered badly, with prices falling by 14 per cent during the year. The US and Ireland were also near the top of the losers' table with annual price drops of 12.1 per cent and 9.1 per cent respectively.
Property consultancy Knight Frank, which carried out the research, said not all markets were at the same point in the cycle, with 19 per cent of the countries it looked at still seeing price rises in the final third of 2008.
Although house prices rose by more than 10 per cent last year in seven countries, values had now started to fall in six of them, it added.
The survey comes as new data from the Halifax showed UK house prices fell by 2.3 per cent last month, resuming their long-term downward trend and reversing gains made in January.
The slide left the average home in the UK costing £160,327, according to Halifax. It also pushed up the annual rate at which prices are falling to a new high of 17.7 per cent.
Economists had cautioned against reading too much into the surprise 2 per cent rise Halifax reported for January, and yesterday's figures were in line with ones reported by Nationwide for February, which showed prices dropping by 1.8 per cent, while the annual rate of decline increased to 17.6 per cent.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "The very sharp 2.3 per cent month-on-month fall in house prices in February reported by the Halifax confirms that the unexpected 2 per cent rise in January was an anomaly and house prices remain very much on a downward track."
House prices have now fallen back to a level last seen in August 2004.
But Halifax said there were some "tentative signs" that housing market activity was beginning to stabilise. The price falls of 3.6 per cent during the three months to the end of February, were a slight improvement on drops of between 5 per cent and 6 per cent that have consistently been recorded for three-month periods between June last year and January this year.
Martin Ellis, housing economist at Halifax, said: "Continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are, however, likely to mean that 2009 will be another difficult year for the housing market."
House prices: The biggest losers
United Kingdom -14.7%
United States -12.1%