The average UK asking price for a home coming onto the market fell by 1.2% to £310,000 in September, according to Rightmove.
Homeowners typically enjoy an autumn spike in property values, but new data for England and Wales shows that this is the first fall recorded at this time of year since 2013.
It equates to a drop of around £3,660 in average values.
The property website said a 2.9% or £18,358 price slump in London had played a part in the drop.
The average price of a home in London now stands at £610,912, down from £629,270 in August.
The drop was exacerbated by larger falls in some of the capital’s high-end boroughs such as Kensington and Chelsea, where property values plunged by more than £300,000 from about £2.1m to £1.8m.
The North East and Yorkshire and the Humber bucked the downward trend, with asking prices there increasing month-on-month, by 0.5% and 0.2% respectively.
Housing demand remains high, the figures showed, with the numbers of sales being agreed by estate agents up by 4.8% on a year ago – including in London, which saw an increase of 5.6%.
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.”
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.”
Source: Sky