The usual autumn house price bounce has failed to materialise, with sellers typically asking for £3,600 less in September than in August, figures show.
In London the fall has been particularly sharp, with more than £18,000 having been shaved off average asking prices in the space of a month.
High-end parts of the capital have seen average asking prices plunge by more than £300,000 since August.
Across England and Wales, the average price tag on a property coming on to the market fell by 1.2 per cent or £3,660 month-on-month – marking the first monthly decrease for this time of year since 2013.
The usual autumn house price bounce has failed to materialise, with sellers typically asking for £3,600 less in September than in August, figures show (file photo)
Property website Rightmove, which released the figures, said a particularly large 2.9 per cent or £18,358 monthly price drop in London has helped to push average asking prices downwards.
The average price tag on a London property is now £610,912, down from £629,270 in August.
The average asking price of a home across England and Wales was £310,003 in September.
Rightmove said that if London was removed from the figures, asking prices across the country would have seen a smaller average fall of 0.5 per cent.
High-end boroughs in London in particular are going through a price readjustment.
In Kensington and Chelsea, the average asking price on a home was pushed under the £2 million mark between August and September.
In London the fall has been particularly sharp, with more than £18,000 having been shaved off average asking prices in the space of a month (file photo)
In August, the average asking price there was £2,153,871 but by September it had fallen to £1,845,692 – a fall of 14.3 per cent, or £308,179, in the space of a month.
Robert McLaughlin, sales director at Kinleigh Folkard and Hayward in London, who was quoted in Rightmove’s report, said: ‘We’ve advised sellers in many locations across London that the current market requires sensible and realistic pricing.
‘Pockets of high demand still exist but tend to be concentrated around specific streets, schools and transport hubs.’
Miles Shipside, director of Rightmove, said: ‘Estate agents are clearly advising many sellers that they have to lower their price expectations to fit in with buyers’ stretched financial resources, with that price compromise hopefully generating extra buyer interest.’
Rightmove said that while affordability constraints are a major factor in the slowing pace of price rises, demand for the right housing at the right price remains strong, with the numbers of sales being agreed by estate agents up by 4.8 per cent on a year ago – including London, which is performing strongly at 5.6 per cent up despite its large monthly price fall.
Rightmove’s figures also show that across the regions, the biggest monthly decline in asking prices in percentage terms was in Wales, where asking prices fell by 3.3 per cent a month to reach £181,231 on average.
The north east of England and Yorkshire and the Humber bucked the downward trend, with asking prices there increasing month-on-month, by 0.5 per cent and 0.2 per cent respectively.