Data from housing website Rightmove showed that the average price set by sellers fell by 0.4% between May and June to £226,346. But asking prices are still 6% higher than at the start of the year, fuelled by a shortage in available properties.

Rightmove blamed the decline on mortgage lenders, which it said were increasing their rates and continuing to demand large deposits from first-time buyers, forcing vendors to be more competitive.

Values dropped the most on the month in East Anglia, the North and the Southeast. Prices slipped 0.1% in London. They rose in the East Midlands, Wales and the Northwest.