People in England and Wales putting their homes up for sale have cut their prices by nearly £3,000 during the five weeks to June 14 to an average £239,564, reducing annual house price growth to just 0.1%.

The move, which follows a 1.2% jump in asking prices during the previous month, suggests sellers' have finally accepted that their home is not worth as much as it once was, property website Rightmove said.

The fall, which was the first ever recorded by Rightmove during June, traditionally seen as one of the peak months of the house selling season, came as the average number of unsold properties on estate agents' books rose to a record 75.

Miles Shipside, commercial director of Rightmove, said: "In spite of the lowest housing transactions for 30 years, new sellers had been coming to the market asking for record prices.

"It was a mad state of affairs that defied the laws of economics. Thankfully new sellers are now taking some pro-active steps to price more realistically from the outset to attract increasingly hard-pressed buyers."

The group said sales were still going through, and there was pent up demand for the right property at the right price. But it warned that the ratio of properties for sale to people who had successfully bought a new home had doubled during the past year to 15 to one.

It added that "run-of-the-mill" properties that were not much different to others on the market had to stand out as "bargain buys" to sell.

The widening gap between asking prices and what buyers are currently willing to pay or able to afford is behind the low level of transactions in the property market.

Rightmove said further reductions in asking prices would be required to sell homes where there was an oversupply, as buyer affordability continued to deteriorate against the backdrop of rising living costs and higher mortgage rates due to the credit crunch.

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