According to the Royal Institute of Chartered Surveyors (RICS), house price falls increased to a historical low in March, as 78.5% more surveyors reported a fall than a rise in prices, which is an increase from 65.7% in February.

Surveyors reported that prices declined at a faster pace than in the previous month across all regions in England and Wales, except for Yorkshire and Humberside where the pace of decline remained unchanged. The sharpest house price falls took place in the East Midlands (89%) and East Anglia (86%), while less heavy falls took place in the North West, Wales and London. In Northern Ireland, surveyors are still reporting sharp price falls, although encouragingly, the pace of decline eased back slightly. In

Scotland, house prices are still rising, albeit moderately so.

Demand continued to weaken as new buyers’ enquiries fell further. Around 49% more surveyors reported a fall than a rise in new buyer enquiries, up from 39% in February. It is clear that price falls are being driven by the inability to secure finance rather than an influx of supply into the market.

The ratio of completed sales compared to the stock of unsold property on the market fell to 24.8%, down from 26.3%, which is the lowest figure since September 1996. Both sales expectations and price expectations fell. The net balance of surveyors expecting prices to rise is at an all time low of -73%.

Jeremy Leaf, RICS spokesperson, said: “Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight. The next six months will be a crucial period for homeowners but would-be buyers with larger deposits may see this market as an opportunity to acquire property in areas to which they could not previously aspire as recently as the end of 2007.”