The readjusting of house pricing comes amid news of an imminent recession in the UK as Brits prepare themselves for the worst and face up to the reality that their homes are not worth what they once were.

In fact house prices fell by an average 2.3 per cent in July, however, London, has experienced the biggest reality check with a drop in asking price of up to 5.3 per cent, a whole five per cent lower than in June.

However, despite the fact that affordability is beginning to be addressed, housing market activity is still down by as much as 25 per cent. It seems that mortgage rate falls from a series of building societies including Skipton and Cheshire have yet to make an impact on the housing market as a whole.

However, the price reductions are good news for those who can afford to buy, Miles Shipside, commercial director of Rightmove, said: “Whilst those who do not have to sell are holding off, sellers who are also looking to buy are strongly placed to negotiate an equal or larger reduction in the price of the property they are buying.

“In addition, buyers currently benefit from the best choice in years. For example, properties that are architecturally desirable or in tight school catchment areas are increasingly attainable. Buyers with specific requirements should take a long-term view to try and secure their dream home.”

Speaking of the Government’s reported attempts at reviving the housing and mortgage markets, Mr Shipside added: “Despite some deals being done at prices that begin to address affordability concerns, the number of transactions this year is in danger of being the lowest since 1959.

“This raises serious questions as to whether any short-term incentives by individual UK entities, such as the Government or the Bank of England, would be effective in speeding up the market recovery against the backdrop of the global problems of the credit crunch.”

Until the mortgage market loosens up and becomes more flexible, the problem is unlikely to go away. According to Mr Shipside, “The lack of mortgage finance is central to the problem, and perhaps that is where policymakers’ attention should be focused, as the banks can’t or won’t sort out the mess they were instrumental in creating.

“In the meantime, sellers need to continue to price to sell, present their homes to be the best on the street, and promote them better than the rest to really stand out,” he advised.

© Fair Investment Company Ltd