Shoosmiths, with offices in The Lakes, off Bedford Road, said 23 members of staff from the residential conveyancing teams had been laid off as a result of the continuing drop in house prices.

Five employees are also at risk of compulsory redundancy, with three others already given alternative positions within the firm.

The head of residential conveyancing at Shoosmiths, David Parton, said: "The current economic conditions in the UK are having a serious impact on the residential property market and consequently on the volume of work coming into our conveyancing practice.

"We have already redeployed a number of employees into other areas of business in Northampton but, in common with many other law firms who are similarly announcing redundancies in residential conveyancing, we can't sustain the current number of staff in our team."

Shoosmiths is one of the largest law firms in the UK and has seven offices throughout the country, including ones in London, Birmingham, Nottingham and Milton Keynes.

The firm employs more than 1,500 people and has developed rapidly in recent years, with turnover up from £43 million in 2002 to £95 million in 2007.

Five other regional law firms have also announced they are making redundancies in their residential conveyancing teams: EMW Law, Franklins Solicitors, Geoffrey Leaver, Matthew Arnold & Baldwin (MAB) and Tollers.

House prices have now fallen for eight consecutive months, with 7.3 per cent – or £13,500 – wiped off the price of an average house since the peak in October.

The average British house is worth £172,415, having lost £1,168 in value in just a month.