According to the Association of Mortgage Intermediaries’ (AMI) latest Quarterly Economic Bulletin, the regional variation in prices continues to widen as London prices are up 2.1% on the year, whereas those in the North East region are down 7.8%.

The report suggest that gross lending is set to match 2010 level, with lending of £130-£135 billion likely in 2012.

AMI reports that house prices continue to fall, down 2.6% on the year, 0.3% in the three month up to August.

Robert Sinclair , AMI director, said: “Our report shows that at a national level house prices have fallen by 2.6% compared with last year. However