Value of a house is plummeting by £120 every DAY

The asking price of a typical home has plunged more than £11,000 since October, research reveals today.

Prices are dropping around £120 a day with experts warning that the year ahead looks bleak.

The report, by Britain's biggest property website Rightmove, reveals that prices have fallen for the third consecutive month.

They have dropped by a total of nearly 5 per cent since October, including a 0.8 per cent decrease this month. It is a cruel blow for anybody who recently stretched themselves to the limit to buy a home.

The asking price of an 'average' home was £241,642 in October - but it has since dropped to only £230,428, a loss of £11,214.

Overall, Rightmove said house prices have risen by 3.4 per cent over the last year, the lowest annual increase for two years.

This is below the rate of inflation, currently 4 per cent, for the first time for more than two years.

Asking prices have fallen by up to 40 per cent on some properties in recent months, according to the cult website Property Snake, which gives details of asking prices which have been slashed.

One of the most dramatic examples is a two-bedroom house in Marlow, Buckinghamshire, which has dropped from £375,000 to £235,000 since July.

The asking price of another house in the Gloucestershire village of Swindon has fallen from £299,995 to £194,950 over the same period. Price reductions are increasingly common on Rightmove, which advertises around 90 per cent of all homes for sale in England and Wales.

The price falls are hitting some parts of England more than others, with prices still rising in London and the North.

The biggest loser is the East Midlands with prices dropping 6.1 per cent in January to an average of £167,235. The warning follows evidence of major problems in the property market, which had been enjoying a decade-long boom.

In a red alert, the Royal Institution of Chartered Surveyors said last week that prices are falling at a level not seen since the last property crash.

One estate agent, from Salisbury, Wiltshire, said December had been "maybe the worst month we have had in 17 years".

The percentage of estate agents saying prices have fallen has soared to its highest level since 1992.

After years of soaring house prices, experts are united in their pessimism for the year ahead.

Rightmove and other property experts predict prices will tread water at 0 per cent this year. Other predictions are more gloomy, with Capital Economics expecting prices to fall by 5 per cent this year and 8 per cent in 2009.

Miles Shipside, Rightmove's commercial director, said: "Some properties have had their prices dropped by 10 per cent or more."

As a result, many homes are now in the "affordability zone" for homebuyers who used to be frozen out of the market.

He said: "Enough sellers seem to have dropped their prices to encourage potential buyers to look in larger numbers, suggesting we might see a more active market at this lower price level."