House sellers in Britain slashed asking prices by three per cent during the past month in the worst December performance for three years, according to research out yesterday.

Property website Rightmove said average property asking prices fell by nearly £7,000 to £222,410 in the four weeks to December 4, the biggest December fall since the 3.2 per cent drop in 2007 after the collapse of Lehman Brothers.

The latest fall left 2010 asking prices at a virtual standstill, up by 0.4 per cent.

Rightmove predicted national asking prices would at best remain flat in 2011 but could fall by up to five per cent because of forced sales and if a rise in repossessions leads to “distressed sales” by lenders.

Miles Shipside, director of Rightmove, said: “The fact that many would-be buyers do not have the ability to proceed, and some homeowners may find themselves in a position where they are forced to sell, drives prices down.

“These negative factors are likely to outweigh the positive price pressures of pent-up demand for housing and a price under-pinning shortage of quality homes in popular locations.”