According to RICS the net balance of surveyors reporting house price falls climbed to 54.7% compared with 49.1% in December, driven by weakness in demand rather than new supply coming onto the market.

New buyer enquiries also fell, with 35% more surveyors reporting a fall than a rise. RICS says this is the worst figure since October, when the fallout from Northern Rock had begun. New instructions to sell also slipped back, a fact which RICS suggests could be a result of agents rushing property onto the market in December before the deadline for the introduction of Home Information Packs (HIPs).

London, however, bucked the national downward trend, says the report, showing a less negative picture in both new buyer enquiries and agreed sales compared with the rest of England and Wales. Scotland also continues to perform well, as 7% of surveyors reported an increase in prices. Lessening downward momentum also appears to be taking place in the West Midlands, Wales, and Yorkshire and Humberside.

Economists Capital Economics said it seems that the December cut in interest rates didn’t help to kickstart the market as much as it might. Seema Shah said: ‘RICS surveyors’ price expectations continued to deteriorate and hit a new record low level in January, suggesting that the worst is yet to come. Indeed, with mortgage interest rates unlikely to fall as much as the Bank of England base rate this year or next, the housing market will be given little support going forward. We expect annual house price growth to turn negative over the next 6-7 months.’