Homesellers cut asking prices

Asking prices for houses fell by 3 per cent over the past month, in the worst November-December performance for three years, property website Rightmove said yesterday.

The average asking price fell by nearly £7,000 to £222,410 in the four weeks to December 4. That is the biggest November-December fall since a drop of 3.2 per cent in 2007, in the wake of the collapse of Lehman Brothers. Asking prices in 2010 as a whole are at a near standstill, up by just 0.4 per cent.

Rightmove thinks national asking prices are likely to remain flat in 2011 but warns that they could fall by up to 5 per cent if forced selling and a rise in repossessions leads to "distressed sales" by mortgage lenders.

Mortgage approvals for house purchases slumped to 46,000 in November amid the continuing slowdown in the market.