U.K. gets additional evidence that goes to show its housing market is weakening. A London-based property researcher reveals the biggest drop for home values in the past 16 months as the market endures a modest re-pricing that may last for the next 12 months.

Hometrack Ltd., which bases its report on a survey of 5,100 real-estate agents and surveyors, says that home prices averaged 158,200 pounds ($246,000). This is 0.3% lower than the previous month and is the biggest drop since April of last year. In a Bloomberg News survey, a total of 19 economists also forecasted that banks may have granted only 46,500 mortgages in July – the least in the past 14 months; actual numbers will be released by the Bank of England.

With the recent numbers being released, it is obvious that the economy is in a fragile state. Bank of England Deputy Governor Charles Bean, in the 28^th of August, suggested that officials start expanding emergency stimulus and aid the economy’s recovery.

Director of research for Hometrack, Richard Donnell, says, “The housing market is in the process of a modest re- pricing that is likely to run for the next six to 12 months.”

Demand, he adds, is also weakening and the weakening may not just be seasonal. He says, “[There is also] growing weakness on the demand side, a weakness which represents more than just a seasonal blip.”

Demand for homes have been falling the last two months, with last month down by 2.2%. Demand is measured through change in numbers of new buyers registering with real-estate agents.

Though prices went up by 1.5% from 2009, the increase is minimal – representing the least in the last five months. In every region of the U.K., though, prices have gone down – save for Wales, where numbers remained the same.