Asking prices dropped across the UK over the last month as those desperate to sell are forced to offer substantial reductions, according to the latest Asking Price Index report from Home.co.uk.
Eight out of the nine regions of England and Wales saw decreases in asking prices, which have dropped 0.7% on average since mid March, a time when the market is expected to pick up.
In Scotland prices have dropped by 2.9 per cent in the last six months and in Wales prices are down 0.7 per cent over the last year.
Doug Shephard from Home.co.uk warns further price cuts are inevitable as mortgage lenders continue reacting to the credit crunch by increasing their interest rates and cutting cheap deals. This has effectively ended most first time buyers dreams of owning their own home.
Shephard says: "If you starve the market of a third of buyers through higher rates then it creates a self-fulfilling prophecy of price cuts.
"Even the most conservative estimates point to a 10% drop in prices over the next 12 months. These figures show that we are on course for at least that level of reduction in prices."
The only region to see an increase over the last month was East Anglia, but the rise was just 0.1%.
Asking price figures over the last 12 months show that across England and Wales the value of homes has failed to keep up with inflation. Although prices have risen by 2.6% since April 2007, this is still 1.5% below the Retail Price Index.
Also the England-wide average has been artificially bolstered by Greater London prices. Asking prices in the capital have risen by just under 10% since last April. However, they have already started to slide back, decreasing by 1.8% since mid March.
The current average asking price in England and Wales now stands at £257,235, down £1,791 from last month.
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