The average house price now stands at £222,410.
Asking prices have dropped by 3% in December, the fifth month out of six to record a fall., the RightMove House Price Index shows.
Rightmove forecasts that in 2011 sellers will continue to drop their asking prices with the national average falling by up to 5%.
It says the upsides of pent-up demand and fewer marketed properties more than off-set by downside risks of unemployment, increased forced sales, base rate rise and the ongoing mortgage famine.
The estate agency predicts that 2011 will be a good year for landlords, job secure equity blessed trader uppers and deposit-rich and a bad year for forced sellers, deposit and equity poor, tenants and first-time buyers.
But Nick Hopkinson, Director of PPR Estates, is predicting house price drops of 10% next year.
He says: “Despite the relentless positivity of estate agents in their enthusiasm to talk up the property market, UK house prices have gone nowhere in 2010.
“The fundamental factors behinds this: economic uncertainty, mortgage famine, further Inflation above trend, tax rises and public spending ‘austerity cuts’are going to remain with us for the foreseeable future.
“Against this backdrop, even the estate agents are already predicting a further 5% price drop next year. I fear they are being overoptimistic again, just as their thankless job requires.
“At PPR Estates we are forecasting 10% price falls next year for UK house prices. I understand that economic forecasting of this type is at best a ‘guestimate’but any property sellers wanting to hold out for a higher price need to be prepared to wait for years, I fear.”