The latest RICS survey shows that fewer people are moving house, with only 17.4 transactions per estate agent made in the three months to the end of May.
However, for the first time in 10 months, there was a decrease in the proportion of surveyors reporting house price falls.
Some 92.9% more surveyors said house prices had fallen during May, compared with those who thought they had risen. This showed a slight fall from the record 94.7% more who reported falls in April.
RICS says the continuing lack of demand in the housing market is reflected in the collapse in transactions. However, there has been no sign of large numbers of ‘distress sales’ (repossessions or sales from those attempting to avoid the repossession process) taking place.
It will take a worsening economy trickling through into the employment situation to trigger significant declines in house prices.
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Jeremy Leaf from RICS says: ‘While demand remains weak and housing transactions continue to evaporate, there is a very real danger to the wider economy.
‘The property industry will not be the only casualty in the fall out from the credit crunch, with the high street and purveyors of a range of household goods, including furniture and white goods also feeling the pinch.
‘Construction workers such as plumbers and bricklayers will start to see employment opportunities dry up as the pace of housing transactions continues to abate.’