PROPERTY prices in Bournemouth and Poole have plunged by up to 20 per cent according to one local estate agent who has been forced to cut his workforce by a third.

Gary Witheyman, a former chairman of the National Association of Estate Agents, said: "Confidence in the market has gone; it's the worst trading time I can remember and has hit us much worse than the late 80s recession.

"In January this year it was like someone had suddenly turned the lights off. We used to register between 800 and 1,000 new properties every month; at the moment it's down to 120 a month."

He added: "In general house prices here have fallen by around 20 per cent. We recently sold a house which was on the market for £850,000 for £500,000.

"Despite all the doom and gloom, if you've got the money it is a very good time to buy. If you have to sell, you need to be realistic about what price you are looking for."

The managing director of Atkins, Blake & Blake and Tudor estate agents revealed how he had been forced to cut his staff in offices in Wallisdown, Hamworthy, Moordown and Springbourne from 21 to 14.

James Scollard, chairman of BH Property Professionals and owner of Cliftons estate agency, has cut his sales team by half.

"The market is quiet. Prices have definitely dropped by 10 or maybe 15 per cent. The opening of our second office in Winton in January couldn't have been at a worse time," he said.

"I think property prices will continue to drop for the rest of this year but hopefully level out in the new year when it becomes cheaper to buy than rent.

"The problem is the banks, who at one time were offering 110 per cent mortgages, which was ridiculous. Now, it's tough to even get a 90 per cent mortgage. There are still some first-time buyers around; usually they have had financial help from family to put down a deposit."

Jason Spiers, a partner in Corfe Mullen based Richards estate agents, said: "We've noticed a drop in property prices of between 10 and 15 per cent. The halcyon days of two, three or four years ago are a long way off. We are not at the bottom of the market yet but hope it will stabilise within the next few months.

"After making up the bulk of our sales, buy to let investors have virtually dried up. It's a buyers' market and if I had spare capital I'd invest in property when prices are so low."

l A new survey has shown that first-time buyers think they need to save nearly £20,000 to get on the property ladder and will sacrifice eating out, holidays abroad and even delay having children to become home-owners.