The number of homes on the market fell during September as fears of global economic meltdown hit consumer confidence.
New instructions fell back last months as five per cent more surveyors reported supply of property fell rather than rose, according to the RICS housing market survey.
Surveyors blamed fragile consumer confidence and continuing fears over the economy are causing many to think twice before putting their properties up for sale.
The supply squeeze came despite new buyer enquiries marginally increasing during September, with three per cent more surveyors reporting and increase rather than a decrease.
Stocks on surveyors’ books rose slightly during September to an average of 68.9 – up from 66.9.
The number of sales per surveyor over the three months to August also increased fractionally, from 14.1 to an average of 14.5.
The house price balance remains unchanged during September, with 23 per cent more surveyors still reporting prices fell rather than rose.
Price expectations also remained unmoved from August; with a net balance of 23 per cent anticipating prices will decline rather than rise over the next three months.
Every part of the UK, including London, recorded some degree of negative price expectations during September.
RICS housing spokesperson Michael Newey said: “Falling supply of fresh stock is indicative of general fears overhanging the economy, with many potential sellers preferring to stay put for now.
“As a result, the UK housing market remains pretty flat with activity level generally subdued.
“Although it is hard to see what will give the market a lift in the near term, the announcement of a further raft of quantitative easing from the Bank of England will help to at least keep mortgage rates down.
“This, if nothing else, should ease the pressure on existing homeowners and limit the risk of a material pick-up in repossessions.”