Rate rises and more listings mean asking prices are dropping

The figures, from property website Rightmove, show asking prices fell 2% in the five weeks to August 14.

Over the same period the yearly house price inflation rate fell for the first time in seven months.

Rightmove said the drop was in response to interest rate rises and more homes coming onto the market.

The Bank of England has lifted official interest rates on five occasions since November.

Average price

Rightmove said the average asking price of a home in England and Wales was now �192,335.

It said prices had dropped throughout England's southern counties, the Midlands and Wales, while the rate of price rises had slowed in the north.

Wales had recorded the biggest drop, with a 6.8% fall, followed by Greater London at 4.3% and the East Midlands at 2.8%.

The Bank of England can't raise the cost of borrowing five times in nine months without something happening Miles Shipside Rightmove

There had been a 2.4% drop in the South East and a 2.1% fall in the South West, with homes in East Anglia and the West Midlands shedding less than 1% of their asking prices, according to the group.

Prices rose by 1.3% in Yorkshire and Humberside, after a 3% rise the previous month.

Homes in the north added 0.4% on average, down from 2.3%.

Rightmove's figures come after the National Association of Estate Agents said house prices fell on average by 0.11% in July to �207,362.

Miles Shipside, commercial director at Rightmove, said recent rises in official interest rates were creating a buyer's market.

"The Bank of England can't raise the cost of borrowing five times in nine months without something happening," he said.

"While it took much longer than people expected, it is now hitting the housing market at the sharp end and asking prices have been declining in each of the last five weeks."

But he said the market was not at the start of a long-term drop in prices.

Lending rise

At the same time, figures from the Council of Mortgage Lenders (CML) indicated that mortgage lending rose sharply in July.

Lending - including remortgaging - rose by �29.2bn in July, up from �28.2bn the previous month and fuelled by a record �14.7bn in loans for house purchases.

Michael Coogan, CML director general, said that the lending figures indicated "a strong seasonal revival in the house purchase market this spring".

However, he suggested that the full effects of two consecutive Bank of England interest rate rises had not yet impacted their lending figures, as the data records loans made at the completion of a house purchase.