Rightmove figures show second consecutive month of falling prices and says post-election with be a 'more challenging period'

House prices are likely to stall next year as increased supply from forced sales combines with post-election uncertainty, according to Rightmove.

The warning came as the property website published its latest figures, showing prices have fallen 2.2% this month to an average of £221,463.

It is the second consecutive month to show a drop and Rightmove predicted January would produce a third month of falls as the normal winter malaise puts off sellers.

The body is predicting a burst of activity in the new year, followed by a “more challenging period” after the election, with average prices remaining static at the year end.

Overall, December’s prices were up 1.7% on last year. But month-on-month falls were seen in most areas.

The north of England took the biggest regional hit, with a 5.8% fall since November. In East Anglia, prices rose by 0.5%, making it the only area to show a rise.

Rightmove said: “Rightmove forecasts that the factors leveraging asking prices upwards pre-election will be countered by negative price forces post-election, the net effect being national average asking prices standing still during 2010."

Commercial director, Miles Shipside, added: “We have already seen how some local markets have been adversely affected by over-supply of property and a lack of mortgage ready buyers, and more areas could become similarly blighted if forced sales increase later next year as expected.”