Property website Rightmove.co.uk has suggested that sellers should aim to slash prices in a winter sale.

The Rightmove survey recommends that house prices should be cut by 8% to prevent stagnation in the housing market.

Figures for December show that the asking price of a home fell to 189,733 pounds in December, down 600 pounds from Novembers 190,329. This drop is not enough to tempt buyers into the market and many are waiting for further falls.

Demand and supply also appear to be taking their toll on the market. More homes are staying on the market for longer periods of time while estate agents are set to enter 2005 with their stocks one third higher than in January 2004.

Rightmove also believe that ‘life squeezed out of the housing market by soaring house prices and 5 interest rate rises’.

Commercial director of Rightmove Miles Shipside, said:’Homeowners who want to sell need to be much more realistic with their asking prices if they want to persuade buyers back into the market. Even once the quieter holiday period is over, sellers will find themselves competing with a lot of other properties on the market. In any business, excess supply and low demand means one thing: cut prices. There needs tobe a reason for activity to pick up and a ‘winter sale’ appears to be the only way available tosellers and their agents. The proof is that some properties that have been appropriately discounted are selling, even in the current market,’ he adds.

The first half of 2004 saw surging asking prices, which rose almost 15% or over 25,000pounds, to peak at more than 196,198 pounds in early July.

‘Since then, we’ve seen prices correct by a modest amount, Asking prices have dropped from their July peaks by about 3.3% or almost 6,500 pounds, although the Halifax and Nationwide indices have not yet reported these declines fully. In the October to December period, asking prices are down just 2% ” but don’t forget that we saw rises of well over 2% in every month between February and June.’

‘While there are regional variations, this months paltry fall of 0.3% overall, or less than 600 pounds, is nothing like enough to summon buyers back into the market. Its just whistling in the wind.’

‘The homeowner who bought prior to 2004 has reaped the benefits of a huge surge in house prices and, even with the falls we have seen so far, asking prices are still higher than they were as recently as May. Most homeowners are sitting on plenty of equity, built upover recent years.’

‘Buyers are now clearly waiting to see sellers make a meaningful gesture in adjustingprices, a signal that they should return to the market. Sellers will need to be much moretempting to increase buying activity.’