Property prices drop as market flooded

UK property asking prices dropped for the second month in a row as the market was hit by over-supply, according to property website Rightmove.

The survey also found that the market had also been subdued in the summer period.

Sellers reduced prices by 1.7 per cent during the month to 7 August, leaving the average asking value down by £4,091 at £232,241.

Soaring numbers of sellers outnumbered buyers, with the imbalance in supply and demand compounded as many house hunters took summer holidays.

Rightmove found available stock per agent rose to its highest August level for three years, up 41.3 per cent on a year earlier to 29,220 a week.

It warned market conditions "bear some similarities" to the torrid second half of 2008 when the credit crunch left prices plunging by 7.1 per cent as agents struggled to shift stock.

Rightmove director Miles Shipside said: "There needs to be a spur to cause prices to rise.

"However, as mortgages won't become available to the masses and last year's stock shortages show no sign of reappearing, we can't see it happening during the remainder of 2010."