Areas of the country most vulnerable to public sector job cuts have been warned to brace themselves for falling house prices as research reveals a widening gap between state and private sector-focused property markets.

Analysis by research group Hometrack for the Guardian shows those areas of the country with the highest proportion of public sector employees are already seeing homes sell significantly further below their asking price than elsewhere. Hometrack says the findings are an early indicator of stagnating and even falling prices in areas such as Aberystwyth, Rhyl and Morpeth in Northumberland.

"In housing market areas with a high proportion of public sector employees, more than 40%, the underlying strength of the housing market has been weaker than the national average," says Richard Donnell, Hometrack's research director.

"These areas look set to weaken more than is the case with areas with fewer public sector employees. There will be a widening gap."

Oo...does that mean they've finally twigged that public sector workers are people? Amazing.