The ratio of properties on the market to buyers has doubled to 15-to-one in a year, forcing homeowners to slash prices.
Only one in every 15 properties on the market were sold last month, according to figures published today.
The oversupply has forced owners to slash nearly £3,000 off the average house price in the last five weeks.
The average home is now valued at £239,564, a fall of 1.2 per cent. The drop is the first ever recorded fall in house prices in June, which is traditional seen as peak season for house selling.
Rightmove, the property website who produced the figures, said sellers will have to slash prices further still to attract buyers. Miles Shipside, commercial director of Rightmove said homeowners will need to "take at least 10% off" of what "they thought of asking for their property at the peak of the boom."
On average there are now a record 75 unsold properties on the books of every estate agent in the country.
The report warns "run-of-the-mill" properties are being particularly badly hit and semi-detached homes in commuter towns need to be marketed as rock bottom "bargain buys" to stand any hope of selling.