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Sellers slashing prices at fastest rate for four years

In a fresh blow for the housing market, a study published today reports the largest drop in asking prices for four years as sellers slashed prices at a rate of £140 a day.

The Rightmove house price index shows that sellers' asking prices were cut by an average £4,138 over the month, a fall of 1.7 per cent since June and the first recorded fall since January.

The average asking price in July fell to £242,097, from £246,235 the previous month.

Further depressing news included in the study is the fact that there were twice as many sellers as buyers.

Miles Shipside, director of Rightmove, said: "In all but the most stock-starved micro-markets seller levels substantially outnumber those of proceedable buyers."

The figures come hot on the heels of LSL's downbeat index published on Friday which reported that house prices fell for the first time on a monthly basis since last year and that transaction levels fell to the second lowest monthly level since 1995.

A study from accountants PricewaterhouseCooper, published at the end of last week, also painted a gloomy picture for property market prospects.

Its UK Economic Outlook suggested that by 2015 house prices will still be around eight per cent lower than they were in 2007.

Chief economist John Hawksworth predicted that it won't be until 2020 that there will be a gradual ease in credit conditions.

He warned: "Over the next couple of years, we expect the UK housing market to remain relatively flat while economic uncertainty persists, particularly in relation to the eurozone crisis."

In the short-term the bad weather – along with the eurozone worries – will continue to hit house sales, warned Mr Shipside.

"Those keen to sell this summer have the challenging confluence of miserable viewing weather, the continuing credit-crunch plus a sporting distraction of Olympic proportions. Those who have been on the market for many months might consider the prospects of achieving a sale to be somewhat of an Olympic an challenge given that actual sales completions are just half what they were five years ago."

"Unsurprisingly, agents report that while location remains important, good quality properties in terms of finish and layout are easier to sell but also harder to find," said Mr Shipside.