Regional differences in the housing market became increasingly marked during March as activity remained subdued and prices continued to fall, the Royal Institution of Chartered Surveyors.
The number of potential buyers registering with estate agents fell slightly during the month as concern over the state of the economy and worries about rising interest rates added to the problems in the mortgage market, RICS said.
A balance of 6 per cent more surveyors reported a fall in buyer numbers in March, with the ongoing shortage of demand continuing to put downward pressure on prices.
Across the UK, 23 per cent more surveyors said house prices fell last month than those who reported a rise, although the majority of those who thought property values declined said they dropped by less than 2 per cent .
However, there were significant regional variations, with a balance of 17 per cent of surveyors in London actually reporting price rises, while the proportion of those reporting price falls was lowest in Scotland, the South-east and East Anglia.
At the other end of the spectrum, a balance of 52 per cent of surveyors in the East Midlands and 51 per cent in Yorkshire and Humberside said house prices fell, with surveyors in these regions also reporting steep falls in sales.
Buyer demand increased in Scotland, Wales and the South-east, but surveyors in large parts of the Midlands and northern regions of England reported a considerable drop in activity.
Going forward, 24 per cent more surveyors think prices will fall rather than rise, the 10th consecutive month during which further drops have been predicted.
But they are more optimistic about activity in the housing market, with a balance of 5 per cent expecting sales levels to pick up during the coming three months.
RICS spokesman Ian Perry said: “The low level of buyer interest in many parts of the UK continues to impact on the market, resulting in some downward pressure on prices.
“With the prospect of forthcoming interest rate rises and continued shortage of mortgage funding, it seems that overall recovery for the national housing market is still some way off.”