House sellers are typically knocking nearly £20,000 off their original asking prices - the biggest discount in two years, property website Zoopla.co.uk says.
Two out of five UK homes currently on the market have been reduced in price, showing sellers have become "more realistic and more desperate" as winter closes in, Zoopla said.
Homes where the asking price has been slashed have seen typical reductions of £19,500, a figure which is £3,500 more than the average cut this time last year, Zoopla said.
Sellers are shaving 7.4% off original house asking prices, compared with a 6.1% reduction during the same period in 2010.
The latest figure is the biggest discount in money and percentage terms for two years and represents £5 billion worth of price cuts across the UK, Zoopla said.
Nicholas Leeming, business development director of Zoopla.co.uk, said: "With the current economic uncertainty and difficulty buyers face in finding funding, it is no wonder that sellers are having to reduce prices in order to encourage sales.
"And with the latest economic forecasts for 2012 looking decidedly gloomy, sellers may have to reduce their expectations further if they are serious about making a move."
Glasgow has seen the biggest discounts, with an average reduction of 9.1% - £12,881. The vast majority of homes with the biggest house price reductions were found to be in the North.
London, where the market has tended to hold up with large numbers of overseas buyers, had the lowest proportion of price-reduced homes in the UK, with just under a third (32%) seeing asking price reductions.
Fears have been growing of a "perfect storm" in the housing sector, with construction at its lowest since the Second World War, mortgage lending tightly restricted and soaring rents.