SELLERS who get offers below their asking price might be well advised to grab them in the next few weeks, as reports show that property prices are static in three-quarters of England and Wales ahead of further interest rate increases widely expected later in 2007.

The big problem in the market, according to Richard Donnell, research director at Hometrack, a leading online collator of housing market data, is that a growing proportion of homes on the market are held by 'discretionary owners' only prepared to take the asking price or something very close to it.

Donnell expects this to trigger a marked increase in the average length of time taken to sell. As the sales rate slows down, he thinks, we will switch into a "buyers' market".

Trevor Kent, a Thames Valley-based estate agent, shares his concern: "The market has about 15 per cent more homes on sale than usual, because everybody dashed to beat the deadline for the Government's introduction of Home Information Packs (HIPs)," he said.

"It means that owners really keen to sell are having to reduce prices. The market is quietening quite dramatically, even before we factor in further rate rises."

The Hometrack survey for June confirms a marked weakening in the market - falling demand, after four interest rate rises within a year, while the supply of homes for sale surged.

Now market observers are looking anxiously at August 1, when the HIPs fiasco reaches a new chapter and becomes legally required on all homes with four bedrooms and above.

That could trigger legal hassles as some owners try to get around the new law by saying their homes have three bedrooms and a study.

Mr Donnell believes the supply of homes for sale in June was also boosted by owners keen to "take the money and run" at the top end of the market.

Hometrack economic director Gary Styles fears that bank base rates around six per cent by the end of 2007 point to a housing market with "far less bounce" in early 2008.

By then, if rates keep rising, consumer confidence could be at rock bottom.

Mr Styles also believes that it is only a rush to remortgage by some owners which has kept mortgage figures buoyant in recent months.

He said: "With bank base rate expected to rise to 5.75 per cent in July, we anticipate total mortgage growth will slow to ten per cent by the end of the year from around 11.2 per cent in May."

Nationwide building society's analysis for June reckoned house prices showed an average increase of 1.1 per cent during the month - though agents around the country expressed surprise that the society could still show such a bullish figure.

Nationwide says the average house, selling at £184,700, costs more than £18,000 than its value a year ago. Owners have enjoyed a rise of more than £50 per day.

One leading agent Savills, claims price growth in prime central London areas like Knightsbridge and Belgravia has gone "off the boil", while south-west London areas like Barnes, Fulham, Putney-Richmond and Wandsworth have surged ahead to show 31 per cent annual rises by the end of June.

Another agent, Knight Frank, claims prime central London rentals are also surging, hitting 12.2 per cent on an annualised basis in June 2007, the highest rate since 1999.

Biggest rises, topping 14 per cent, were in Wapping and Canary Wharf.

Mr Donnell added: "The buoyancy of the London market over the past 18 months has been a major driver of the headline rate of growth.

"Now, however, London is witnessing a clear turnaround in market conditions which is supporting the current slowdown."

The Building Societies Association says that approvals at £4,739 million for May 2007 showed a marked reduction from £5,454 million in May 2006.