Sellers slashing prices at fastest rate in four years

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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' average 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.

Research into buyer behaviour on the Rightmove website shows that potential buyers spend an average of just 2.7 seconds looking at a seller's summary adverts.