The Council of Mortgage Lenders (CML) has forecast a 7% fall in house prices over the course of 2008.

The organisation expects there to be 35% fewer transactions than in 2007 as falling prices and restrictions in bank lending meant people stayed put.

Mortgage lending in April was up 5% on March's figure, the body revealed, but showed an 8% fall year-on-year.

"In the wake of the credit crunch, 2008 will be remembered as a very weak year in the housing market," said Michael Coogan, director general at the CML, which had predicted a 1% rise in prices for 2008 at the end of 2007.