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The majority of regions in England will see average house prices fall in 2008, experts have predicted.

This is the major finding of a comprehensive study conducted by Your Mortgage magazine.

According to Your Mortgage, the only regions expected to experience growth this year are London and the North.

Inner London is forecast to be the best-performing region of 2008, with an increase of 4.6 per cent.

House prices in Greater London will not be far behind, with growth of 4.3 per cent.

The west Midlands, on the other hand, is expected to fare worst of all regions, with house prices set to drop by 3.5 per cent.

Birmingham, in particular, is predicted to suffer a decrease of around 3.7 per cent.

However, while most areas are expected to see prices fall in 2008, the majority will recover and experience growth in 2009 and beyond, Your Mortgage said.

Pauline McCallion, Your Mortgage: "Although property values in most areas across England are set to drop by some degree in 2008, prices will recover in 2009."

All regions are expected to have posted improved figures by 2012, although some rises are far more modest than others, the magazine added.

Average house prices in Walsall, west Midlands, are only expected to improve by 1.1 per cent by 2012, for example.

At the other end of the scale, house prices in Hackney, East London, are expected to rise by a whopping 30.5 per cent by the time the city hosts the Olympic Games in 2012.

Pauline McCallion, editor of Your Mortgage, said: "Although property values in most areas across England are set to drop by some degree in 2008, prices will recover in 2009. The majority of English homeowners should take comfort in the fact that any decrease is likely to be a distant memory by 2012, as these figures show.

"For those homeowners now worried that selling in 2008 might be a foolish idea, all may not be lost. Although these figures can act as a general guide, specific locations may fare better than their regional average. Check out the value of your home with a few estate agents in your area, or visit yourmortgage.co.uk for a postcode sector level prediction."

Figures from Nationwide building society revealed that the average price of a UK property rose by £8,334 last year, putting it at £182,080 at the end of 2007.

Nationwide's figures also show that house prices fell for a second consecutive month in December 2007.

Prices dropped by 0.5 per cent in December after slipping by 0.8 per cent in November.

However, property prices were still up by a healthy 4.8 per cent year-on-year from December 2006, the firm added.

A recent report by The Daily Telegraph revealed that the average property in the UK will lose £8,000 or more of its value in 2008.

The Daily Telegraph study forecasts that house prices will drop by up to four per cent this year.