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Asking prices 'drop 1.6%'

The number of unsold properties on estate agents' books has reached record levels, leading house asking prices to fall for the first time this year.

A report by Rightmove found that competition to attract buyers and low demand has prompted the largest fall in July since 2008.

Rightmove director Miles Shipside said: 'Summer sellers are more nervous about their selling prospects than the early birds who asked ever higher prices during the first six months of this year.'

He warned against homeowners becoming 'trapped' in their current property by not having enough equity in their homes to drop prices further. While asking prices now are up 0.1 percent on a year ago, they are 14 percent lower than they would be had they risen at the same rate as inflation.

'While property has a good long-term record as a hedge against inflation, in the short term property prices have become significantly cheaper in real terms as the cost of living has gone up, while the cost of housing has stood still or gone backwards,' he added.

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