HOUSE prices will fall by up to three per cent during the first few months of next year before stability returns to the property market, analysts have said.

Property website Hometrack predicted that buyers would wait until summer before being tempted back into the market in large numbers, leading to fewer sales of houses next year.

Hometrack reported a 0.6 per cent fall in house prices during last month - the fifth month in succession that they have gone into reverse.

But according to the National Association of Estate Agents, last month's fall was even heavier, at 1.1 per cent, and completed six consecutive months of declines.