The outlook for house prices is at its lowest level since May 2009, according to the August RICS Housing Market Survey.
The research shows substantially more surveyors reported falling rather than rising prices, but RICS says transaction activity remains steady.
The weaker trend in prices is being driven by a combination of increasing new vendor instructions and falling new buyer enquiries.
The outlook for house prices has also deteriorated, with the net balance falling from -28 to -38. But the softer trend in prices appears to be fuelling a pick up in sales expectations. The net balance for this series rebounded from +8 to +18, its best level since May.
RICS says the net balance of new instructions is +12, which is lower than last month’s reading of +33. This suggests that the initial surge in supply following the abolition of HIPs has started to fade.
The net balance of new buyer enquiries fell from -10 to -17. RICS says the gap between these two series, which is the best lead indicator of future price behaviour, has narrowed for two successive months.
The average number of sales per surveyor increased by 1 per cent during August to 16.7, making it broadly stable for the past four months.
Meanwhile, the average number of properties on surveyor’s books fell by 1.6 per cent to 67.8. As a result, the sales to stock ratio, an indicator of market slack, edged up from 24 per cent to 24.7 per cent.