House prices in Oxfordshire have finally started to tumble, with agents reporting a marked downturn in activity in the last few weeks.

According to Government statistics, more than £3,000 has been cut from the average price of a property in the county between March and May.

Oxford had resisted the downturn in property values hitting other parts of the country, but estate agents and homeowners said yesterday the area was starting to feel the effects of the credit crunch.

Latest Oxfordshire figures from the Land Registry show the average price of a property in May was £250,402, a drop of 1.2 per cent on the March high of £253,534.

And estate agents say areas of the city popular with first-time buyers like Greater Leys have seen house prices fall by as much as £35,000.

Colin Bown, senior negotiator at Charles Lawson in Cowley Road, said: "It's a hard market at the moment.

"Central areas like East Oxford are still quite good but start going out to areas like Greater Leys and prices are dropping.

"Three bedroom houses are on the market there now for £215,000 but last year they were £250,000.

"The problem is the mortgage market. Hundred per cent mortgages have gone and 95 per cent mortgages have almost gone."

Nationally, the Nationwide Building Society's average house price index slid by 0.9 per cent in June to stand at £172,415, the eighth consecutive monthly fall.

The slowdown is causing real problems for Nick Ellacott corr and his wife Ali who put their two bedroom flat in Banbury Road, Kidlington, on the market almost a year ago for £190,000 after deciding they needed somewhere bigger for their one-year-old daughter, Kirsty.

The flat is now on the market for £175,000 and they have not had a single inquiry in the past month.

They haven't shown anyone around the property for eight weeks, and estate agents are saying drop the price to £160,000.

Mr, Ellacott, 33, an advertising salesman at the Oxford Mail, said: "Everybody I've spoken to that's selling says they're struggling."