Oversupply and overpricing is threatening to stall the market, Home.co.uk has warned.
The property search engine claims that the number of properties getting discounted is now close to a six-year high.
Home said the number of properties reduced in price during May was up 28% annually at 74,847, the highest figure since October 2012.
There were also new records for total stock on the market in England and Wales, hitting a two-year high in June at 516,845, up 8.5% annually.
Similarly, new instructions were up by 11% annually.
Home.co.uk data shows that 58,614 new properties were added to the market in the past two weeks.
This boost has been led by a 20% increase in the east of England and 20% in the south-west.
Overall, Home puts average asking prices at £310,240 in England and Wales, up 1.4% annually and 0.4% on a monthly basis, while typical time on the market has increased by three days compared with June 2017 at 81.
Doug Shephard, director of Home, said: “These metrics clearly show that now, overall, the market is entering a slowdown phase in the property cycle.
“In short, the downturn that started when the London bubble began to deflate has now spread across sufficient regions that the national figures reflect the same. However, this message has not yet reached many of the vendors that placed their properties on the market last month with optimistically high prices.”
Agents on the ground have seen similar scenarios of oversupply, but are insisting that deals are still taking place.
Lucy Pendleton, director of estate agents James Pendleton, told EYE: “The significant rise in the number of on-the-market price cuts is extremely telling.
“The name of the game is to price keenly in this market to drive interest. Even when deals are to be had, in a healthy market, that is usually something that happens behind closed doors and only becomes truly apparent when the data is published by the Land Registry.
“The fact that prices are now dropping before your very eyes en masse on all the property portals is a sign that over-optimism is slowly giving way to reality.
“This is less so in London where price growth has been cooling for some time. The regions have been determined to remain on their own, more bullish, trajectory lately. It can appear to have its own power source in this transitory market, but the truth is the nation’s secret to market vitality is London, and that connection is never severed.”
In Cambridge – a city that regularly tops indices for price growth and sales activity – Cheffins estate agency says it is two- and three-bedroom flats, usually the reserve of now-deterred buy-to-let investors, that have been more sticky.
Richard Freshwater, director of Cheffins, said: “As we are seeing fewer of these types of buyers within the market than we have for many years, there is now a large supply of these properties, and they are not selling at the rate seen previously.
“This market is seeing a bias for all homes being sold at the correct level. Overpricing has been the killer for some homes on the market, and sellers who are realistic on the value of their home can now reap the benefits of active buyers in the market.”
However, over in Northern Ireland, estate agent Michael Chandler said lack of supply is still a major issue.
He said: “There is very limited stock across the board with confidence low regarding people moving up the ladder, due to Brexit and our Government, or lack of it.
“Northern Ireland has been flooded with new-builds in the last year which is also choking the resale market.
“Bidding wars are common on city properties, whilst country homes with land remain extremely hard to shift.”