UK house prices will fall by a total of 30% from peak to trough, according to the head of Barclays Bank.

John Varley warned that the UK was only halfway through the slump and that there was likely to be another 10-15% to come off prices before the market bottomed out.

He also suggested the jobs market would continue to decline, with unemployment hitting 2.5m in 2009.

"Unemployment is likely to go north of 7% over the course of the next 12 months or so and might be as high as 7.5%," he said.

"I think an additional 700,000 people unemployed over the course of the next 12 months is certainly possible to contemplate."