LONDON (Reuters) - British house prices fell for the sixth straight month in April to record their first annual decline in more than 12 years, just as the consumer mood soured to its bleakest since the slump of 1992.

Evidence from two surveys yesterday came just after a Bank of England policymaker warned there was now a danger of house prices crashing by more than 30 percent and that the British economy faced a real threat of recession.

The economic data paints a grim backdrop for Prime Minister Gordon Brown on the eve of local government elections in which his Labour Party is expected to fare badly against resurgent opposition Conservatives, who are consistently leading national opinion polls.

Nationwide building society said house prices fell 1.1 percent this month to £178,555 ($354,000), after a downwardly revised 0.7 percent fall in March — more than twice the rate of decline forecast by analysts. Prices were one percent lower than a year ago.

"Rapidly deteriorating sentiment over the housing market also heightens the risk that house prices could fall more sharply over the next couple of years," said Howard Archer, economist at Global Insight.

"Consequently, it is very possible that a drop of more than 20 percent in house prices could occur over the next couple of years."

Britons, about two-thirds of whom are home owners, are particularly sensitive to house price moves and Prime Minister Brown was quick to get on the airwaves after the Nationwide report with a promise that he would make tackling falling prices a priority.

"My aim and my priority is that we can lead the people in Britain through this economic problem and do so by taking the right decisions to get liquidity to the banks, to make sure that the housing market starts moving again," he told BBC Radio.

With cash-strapped lenders still making it harder for Britons to raise mortgages — approvals for new loans fell to a record low in March — Brown may have his work cut out for him.

The GfK/NOP consumer confidence index fell to -24 this month from -19 in March as people turned gloomier on the state of the economy and their own personal finances.

That was the lowest reading since November 1992 just months after sterling was thrown out of the European Exchange Rate Mechanism and the then-Conservative government lost its reputation for sound economic management.

After more than 10 years out of power, only in recent months have the Conservatives shown real signs of being able to challenge and even topple Labour.

Polls now show Britons also losing faith in Brown's management of the economy — something he has staked his reputation on — as the global credit crunch takes its toll on the housing market and lending after a decade of prosperity.

BoE policymaker David Blanchflower said late on Tuesday the British economy now faced a real risk of recession and that house prices could fall by as much as a third unless interest rates came down aggressively.

Sterling slid sharply overnight after his comments but other BoE policymakers including Governor Mervyn King do not seem in any hurry to cut borrowing costs again after three rate cuts since December, as food and energy prices are pushing up inflation.

King said on Tuesday that all the gloom and doom about the economy was overdone.

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