It says that 54.7 per cent more chartered surveyors reported a fall than a rise in house prices in January, an increase from 49.1 per cent in December.
RICS claims that the only part of the UK where prices continue to rise is Scotland. Surveyors have reported price rises edging up from 3 per cent to 7 per cent.
The association has also revealed that new buyer enquiries fell at the fastest pace since October.
RICS says that before October, the last time when buyer enquiries reached this level was August 2004.
It says that 35 per cent more chartered surveyors reported a fall than a rise in new buyer enquiries, down from 25 per cent in December.
RICS says that the fall out from credit crunch continues to prevent many would-be-buyers from entering the market and it is likely that demand will remain subdued while mortgage lending criteria is tight.
The stock of unsold property on surveyors’ books jumped by more than 10 per cent and has increased by in excess of 40 per cent since September 2007.
Currently the average level of unsold property per surveyor stands at 85 – the highest level since February 1999 when the average figure per surveyor was 86. As a result the ratio of completed sales compared to the stock of unsold property on the market fell to 28.6 per cent down from 30.7 per cent.
A RICS spokesman says: “A lack of demand and confidence in the housing market is clearly behind the recent price slowdown. Tightening mortgage lending criteria is a block to many who are keen to take the housing market plunge. Agents are finding it difficult to market properties to an audience which has decided to watch the current economic theatre from the wings.
“However, if mortgage lenders filter the recent interest rate cuts into the market, demand should begin to increase. In the near term, the housing market will continue to be shielded from significant price falls while employment conditions are strong. The market need only fear a significant fall in prices if job loses start to multiply.”