Shares of Rightmove, the UK's largest online housing website, plunged today after it said that prices were shrinking further.

Sellers are asking £5,403 less for their homes than they were only a month ago, with the average asking price for a property down, on average, by 2.3 per cent to £229,816, according to Rightmove, whose stock fell by nearly 5 per cent, or 15p, to 306.5p.

In London, where the market has deteriorated sharply, asking prices have dropped by £21,096, or 5.3 per cent, to an average £379,162 in a month. Prices are down 3.8 per cent in the capital over the past year, compared with a 4.8 per cent decline across the UK. Rightmove's figures are not seasonally adjusted to reflect the trends in the market at different times of the year.

Despite such reductions, properties appear to have become more difficult to sell, with Rightmove-registered agents reporting an average 78 unsold properties on their books, up from 77 last month, and 63 in December. “Buyers are currently benefiting from the best choice in years," Miles Shipside, a Rightmove director, said.

Rightmove blames the mortgage drought for the semi-paralysed state of the market, adding that transactions are in danger of dropping to levels not seen since 1959. Then, 876,000 sales were successfully completed, compared with the 1.8 million achieved last year.

Despite fears that there could be a surge in properties being put on the market as the slumping economy forces more borrowers into difficulties with their mortgages, pushing asking prices still lower, Rightmove says that there is no sign yet of such a trend emerging.

Recent new listings on its site stood just 106,000, about 25 per cent lower than typically seen at this time of year. “Those who do not have to sell are holding off," Mr Shipside said.

Estate agents in some areas are reporting welcome hints of reviving demand from buyers, however. Edward Waterson, of Carter Jonas, in York, said: “A surprising number of new buyer registrations and viewings have led to an upturn on offers and sales over the past four weeks.”

Jeremy Leaf, a North London estate agent, and spokesman for the Royal Institution of Chartered Surveyors, said there were some signs of an increase in first-time buyers. “Mortgages are not getting easier but they are getting cheaper and criteria is softening for some groups, such as those with substantial deposits," he said.

Rightmove suggests that there are also some signs of resilience in those areas that will benefit from the extension of the East London train line, due to open in 2010, ahead of the Olympic Games. Prices in Tower Hamlets, Hackney and Islington remain higher than a year ago.

“These boroughs will see the benefit of new transport links in the near future but did not experience the knee-jerk boom in asking prices that the initial Olympics announcement generated in Newham," Mr Shipside said.

Asking prices appear to have risen in the past month in the East Midlands, by 1.6 per cent, on Rightmove's figures, and they held relatively steady in the South West and North, down 0.4 and 0.9 per cent respectively. Prices fell sharply in the North West and in East Anglia, where they down by 3.3 and 3.2 per cent, respectively.

Money Central: The latest house price trends, region by region