The latest monthly survey from the property website Rightmove complies information from estate agents and claims to measure 90% of the market. The report says the average asking price in England and Wales has dropped to £235,219, down from £239,564 in June.
Rightmove survey said the biggest fall in asking prices in July was in the West Midlands, which fell by 3.7% to a little over £192,000. The south-east recorded the second-sharpest decline of 3.3% to £298,700
The only increase was in Greater London, where average asking prices inched up by 0.3% from June to £400,258. The best-performing London borough was Tower Hamlets, with asking prices up 4.1% to £429,500, followed by Westminster (up 3.1%), Brent (up 2.0%) and Kensington and Chelsea (up 1.9%).
Mark Shipside, commercial director at Rightmove, said: "Sellers are finally recognising that they need to undercut their rivals from the outset, rather than testing the market and dropping prices later. Sellers' pricing needs to be at the level where deals are being done. It could be a lot better outcome to price aggressively and sell now, rather than accept a bigger reduction later as prices continue to fall."
The increasing numbers of unsold properties by estate agents reflects the lack of current buyers, mainly due to credit crunch and the difficulties in new home-owner's obtaining a mortgage.
Properties are spending an average 87 days on the market before being sold, up from 83 days in June.
