The annual average price of a house in Oxfordshire has dropped for the first time in eight years, according to Land Registry figures.

The Government's official body, which checks on the number of house sales, has revealed an average home cost £245,293 in July - 0.3 per cent lower than in the same month last year.

It is the first drop since the Land Registry started collecting figures in 2000 and echoes concerns about the housing market around the country.

Now one Oxford estate agent has warned the situation in some areas of the city may actually be a lot worse.

Robert Maxwell, branch manager of Andrews estate agents in Cowley, said: "We have seen property prices fall in the last year.

"In Cowley, properties that were fetching up to £285,000 12 months ago are struggling to reach £250,000 this year.

"A lot of asking prices are not realistic and some properties have been on the market for six months as there is now a lot of choice and people are going for the lowest figure.

"Last year anything would sell. Now it is properties that are new to the market or which have been reduced in price which are moving."

Oxfordshire house prices also fell by 0.3 per cent on the Land Registry's June figure.

Prices have fallen for the sixth month in a row with almost £8,000 - more than three per cent - wiped off the average price of a property in the county since its February peak.

But Gavin West, residential director of Summertown-based estate agents Kemp & Kemp, said values at the top end of the market were less hit by the downturn.

He said: "Poor sentiment in the market has led to a drop in the volume end of the market - properties worth £1.5m plus are much less affected.

"The feeling is anyone buying a house today could be facing another 10 per cent loss in the value of the property, which is not necessarily true. But I'm reasonably hopeful for the rest of the year provided interest rates come down and mortgage lenders can offer rates below six per cent."

Earlier this year, the Land Registry also showed transactions in the county had tumbled to their lowest level since the turn of the century - less than 600 a month. Last year sales were running at about 1,000 a month.

According to figures from the Bank of England, the number of mortgage approvals has dropped by 70 per cent to a record low.

Just 33,000 loans were agreed in July - six per cent lower than the previous month and down from 114,000 in July last year.

Robert Pinheiro put his home in Princes Street, East Oxford up for sale in May for £350,000 but the property is now under offer for £300,000.

Mr Pinheiro, 32, marketing manager for Oxford finance firm Critchleys, bought the property for £263,000 in October 2005, but recently spent £45,000 on a new kitchen and extension as well as redecorating the house from top to bottom.

He said: "I'm disappointed at the length of time it has taken for a serious offer to be made. Especially, given the amount of money and time that has been spent on renovating and extending the property.

"We have received a cash offer and have offered on another property for below the asking price.

"It's now just a waiting game with the owner of the house we want to buy."

The Government has moved to throw a lifeline to first time buyers by freezing stamp duty on properties costing £175,000 of less for the next 12 months from today.

It means the current £125,000 threshold will be changed and lifting the one per cent levy means a home buyer could save up to £1,750. Stewart Lilly, Harwell-based board member of the Federation of Property Professionals, said: "Every little helps, but it is not a big enough increase to help the market place in Oxfordshire. It needs to be on properties worth up to £250,000.

"It will assist the first-time buyer market and, hopefully, help move a lot of standing stock of flats developers are unable to sell."

On one property website last night there were more than 900 homes under £175,000 on the market in Oxfordshire.