The homebuyer is king in Swindon. That is the message from the town's estate agents, who say a new realism is causing house prices to fall, especially at the top end of the market. JAMES WATSON reports.

THE latest figures from the Nationwide Building Society show the average price of a house in Swindon is £151,350, up 22.6 per cent on last year.

But the price increase is beginning to slow, with the latest national figures showing that homes went up by just 0.4 per cent last month.

Matthew James, a senior partner at Taylor James Estate Agents, thinks there has been too much greed over the last few years and people have been setting unrealistic estimates of what their home was worth. Now he says the slowdown is beginning to bite.

For example, a four-bedroom house in Abbey Meads, which was selling for £240,000 in October last year, is now worth £225,000.

Mr James said: "There is now a two tier housing market; the homes which came onto the market in November at November's prices are not selling and will not sell, whereas homes which have come onto the market in recent weeks will sell quickly because they are set at a realistic price.

"If you are selling a four-bedroom home it has got to stand out over and above 30 other similar homes and the only way it will do that is by price. If the price is too high people won't even look at it.

"Too many people are holding on to yesterday's dream in tomorrow's market.

"People are setting their house price based on what they think they need to move. They should be setting it on the price people are willing to pay.

"If your house has been on the market for more than three months then you have to take the price down or it will not sell. People have got to understand the market and ensure they get good advice from their estate agent."

Houses prices are thought to have peaked last November.

The biggest drop is in properties at the higher end of the market.

The latest national figures released by the Nationwide Building Society state the average price rise in February was just 0.4 per cent, the lowest rise since October 2001, but it warned it was too early to predict a market slowdown.

The building society's group economist, Alex Bannister, said: "It is still too early to say this is the start of a sustained slowdown as over the last few years there have been three false sunsets for the housing market, the final one following September 11.

"Each has seen consumer confidence and information turn significantly negative but none lead to a continued reduction in the market.

"We believe that house price growth must ease as affordability constraints continue to grow.

"We calculate that, even with a 10 per cent deposit, over 50 per cent of the working population would now be unable to borrow enough to buy a typical first-time buyer property."

But Mr James points out that national figures cannot take into account the difference between house prices in the north and south.

Prices continue to rise in the north while they fall in the south, and the national figures will not fall until prices are going down nationwide.

Jon Harding, of Charles Harding Estate Agents in Old Town, agreed.

He said: "House prices are levelling off as we speak.

"We had vicious price rises last year but since the beginning of this year it is definitely slowing up.

"I can see the market is levelling off and remaining so for the rest of this year. It couldn't keep going the way it had."