Market house prices look set to fall by 10% over the next 12 months in real terms, as sellers are forced into reductions to attract the dwindling number of buyers, according to the latest Asking Price Index Report from Home.co.uk.
Figures for May show asking price falls in eight out of the nine regions of England, Wales and Scotland for the second month running.
London prices fell 0.2% this month and only East Anglia has bucked the trend with a rise of 0.3%.
Over the last six months the West Midlands has seen the most dramatic drop, of 3.1%. This equates to £1,100 per month for the average house in the area. Scottish asking prices have fallen 2.4% over the last six months.
Doug Shephard of Home.co.uk urges those needing to sell now to take their estate agent's advice and offer realistic discounts to attract buyers instead of chasing the market down with small cuts.
"Better to make a reasonable cut now rather than only small reductions that will not attract sufficient buyer interest or being forced into a drastically painful reduction later," he said.
"A price fall of 1% per month for the average UK home is around £2,500 lost each month. But if you wait 10 months at the current rate of decline the drop is likely to be 10%, that's a fall of £25,000.
"If you need to sell soon, price to sell now rather than hand all the bargaining power to buyers at a later date."
With good mortgage deals and buyers ebbing away due to lenders' liquidity problems and risk aversion Shephard warns plummeting prices could continue for a number of years.
"Many sellers still think the government is going to come up with some magical solution to stabilise prices. That is not going to happen and interest rate cuts are not being passed on to the consumer. If it is possible to wait five to ten years before you sell, do so."
Asking prices in England and Wales have risen by 2.2% since May 2007, however this is a fall in real terms of 1.6% when compared to the Retail Price Index (RPI).
The current average asking price in England and Wales is £256,590.
Notes for Editors
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