Fears of another global economic crisis hit house prices in August, according to the latest survey from the Royal Institute of Chartered Surveyors.
Transactions fell back to June 2009 levels as the number of seasonally adjudsted sales per surveyor over the three months to August dipped to an average of 14.
Average stocks on surveyors’ books fell back to 67 from 70 in July.
Asked why they felt sales were flat, 79 per cent of surveyors cited the general economic uncertainty while 70 per cent pointed to the lack of mortgage finance.
Around 40 per cent of respondents said fears of house prices falls were also affecting transaction levels.
New buyer enquiries fell back in August as 3 per cent more chartered surveyors reported a decrease rather than an increase.
And new instructions moved from a net balance of -8 per cent to 0 per cent.
Overall 23 per cent more surveyors reported prices fell rather than rose, down from 22 per cent in July.
Price expectations also fell, as a net balance of 23 per cent anticipated prices to decline rather than rise over the next three months.
But sales expectations remain positive for the coming months as a net positive balance of 17 per cent hopeful of a modest pickup in activity.
RICS housing spokesperson Alan Collett said: “For the time being, our indicators suggest that demand for homes remain broadly steady, albeit at relatively low levels, despite the renewed bout of economic gloom.
“However, the risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers even where mortgage finance is available.”