House prices in Oxford fell by 4.9 per cent between April and June, according to the latest figures from the Land Registry.

But prices in Oxfordshire as a whole increased by 1.7 per cent, from an average of £233,927 to £238,088.

The average price of homes sold in Oxford during the last quarter was £258,876, compared with £271,572 the previous quarter.

Most of Oxford's price fall was accounted for by detached houses, which dropped from £584,091 to £542,187. Semi-detached houses in Oxford increased in value by seven per cent over the period, to £269,371.

Robert Harrison, of estate agents Cluttons, said: "Prices have definitely levelled out, but things were selling over their asking price in north Oxford earlier in the summer."

He said: "The Government is looking for a soft landing and recent interest rate increases, and we are expecting prices not to drop, but to level out."

The latest fall has reduced the annual inflation rate for homes in the city to 0.05 per cent, while Oxfordshire homes increased in value by 6.3 per cent between April-June 2003 and the same period this year.

South Oxfordshire saw the highest annual inflation at 9.5 per cent, with an average price of £279,952. Cherwell's rate was 7.5 per cent, with an average of £192,048; the Vale of White Horse 2.4 per cent (£235,076); and West Oxfordshire 1.2 per cent (£224,985).

The Land Registry figures show a narrowing of the gap between the north and south of England, with property shooting up by more than 27 per cent in the north west and Wales, and by nearly 26 per cent in the north and Yorkshire and Humberside.

Overall, the cost of property in England and Wales rose by 17 per cent to average £175,401 during the 12 months to the second quarter of 2004.