The latest figures from property Web site Rightmove have shown that there is a larger supply of homes available on the market in comparison to the number of mortgages being approved. Their figures show that there were 1.3 million properties on the market last year but only 530,000 mortgages were approved. The reason for the difference in supply and demand is being blamed on the lack of confidence in the economy and the lack of affordable mortgage lending.

The data also revealed that not all properties are staying on the market until sold. Some sellers are taking their property off the market if they cannot find buyers or if offers are not at the level they want for their property. Many sellers are refusing to lower their prices despite the lack of buyers. In fact the average asking price of the market increased this month by 3.1 per cent to £230,000.

Miles Shipside, of Rightmove, said: "Not all properties marketed have to sell or stay on the market, with a percentage being withdrawn if they fail to find a buyer.

"There is still a clear imbalance between supply left on the market and demand even taking this into account. Demand is restricted by mortgage availability and potential buyers economic circumstances.

"The number of forced sellers and repossessions are the key factor that drives down prices, and to date lenders have shown considerable forbearance in how they manage arrears and are wary of flooding some markets by putting lots of repossessions up for sale.

"There will be individual circumstances, especially in the country’s unemployment black spots, where sellers have to sell. The tactics are to price below the other properties on the market."

In reaction to the current market, Nick Hopkinson, Director of PPR Estates, said: "With house sales volumes remaining on the floor even the estate agents acknowledge that current asking prices are more a reflection of home seller fantasy than what anyone else will really pay in 2011 for property across most of the UK."