In its latest housing market survey, Hometrack says average prices fell by 0.9% over August, compared to a 1.2% drop in July.
The proportion of asking prices being achieved now averages 90.7%, which is significantly down from the 95.7% recorded in spring 2007.
Hometrack says this is a key indicator of prices and falls are likely to continue as long as the proportion remains below 93%.
The survey also shows that although the average time a property is on the market has risen from 11 weeks to 11.3 weeks, the number of viewings to achieve a sale fell for the first time in 11 months.
Richard Donnell, director of research at Hometrack, says: “When the market turns it can take as long as 24 to 36 months for prices to reach realistic levels and we are now well into this process.
“We may well start to see a moderation in the rate of monthly price falls, but with ever growing uncertainty among households over the broader economic outlook the current repricing of housing still has some way to run.”
He adds: “While demand remains weak, a small but growing proportion of agents are reporting some improved signs of buyer interest on the back of lower prices and a modest reduction in the cost of mortgages. This trend could well become more evident over the autumn as we continue to move towards more realistic levels of pricing.”