Tighter mortgage lending conditions continued to dampen the UK housing market in July, according to The Royal Institute of Chartered Surveyors’ (RICS) latest survey.

RICS said, in its monthly survey, that 83% of its members reported falling house prices, which is a small improvement on the 86.9% recorded in June. Activity has continued to slow, as the average number of transactions per surveyor in this quarter fell to 14.4, which was the lowest figure since the survey began. The collapse in transactions came due to falling demand for the third month running. However, the decline slowed in July with 27% of surveyors reporting a fall in new buyer enquiries compared to June’s 35%.

RICS believes the small improvements in the house price balance and new buyer enquiries suggested that house market activity may be beginning to stabilise and it was optimistic that sales activity could pick up as home sellers lower their asking prices.

Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), said: “ The report as a whole shows tentative signs that the decrease in housing transactions is likely to start to stabilise over the months ahead and that there may be some marginally better conditions in the market place in the near future. Indeed, these figures confirm the findings from our own survey that whilst transactions are still low the market is showing signs of levelling out.

“However, whilst aspects of this report are encouraging, I remain concerned that the optimism for the next few months may be scarred by the current uncertainty regarding stamp duty. The confused messages being sent out by the Government will undoubtedly have an impact on consumer confidence as the public is understandably confused at present about whether to buy or sell. The Government needs to clear up this uncertainty as soon as possible to help minimise the disruption to the market place and help the British economy move forward.”