House prices fall for the fourth month in succession

The Royal Institution of Chartered Surveyors (RICS) reported that house price growth remained negative, but supply still remained tight.

Of the Chartered Surveyors questioned, 40.6% more reported a fall rather than a rise in house prices, down from 23.4% in October.

The figures are the most negative since May 2005 when 49% more Chartered Surveyors reported a fall than a rise.

Housing supply has started to loosen to an extent but a strong labour market means those at the margins still remain confident of maintaining stable household finances.

Of the new instructions net balance, 6% more surveyors reported a fall - up from 17% in October, although it still remains negative.

New buyer inquiries improved for the first time in a year - down to 31% compared to October's 41% - but still remains well below the long run average.

Newly-agreed sales declined at the fastest pace since April 1999 (when the question was first asked) - with 36% more reporting a fall than a rise.

Unsold properly meanwhile jumped by 8.7% following last month's rise of 9.7% - which means the ratio of completed sales compared to unsold property on the market fell to 33.1% making market conditions the loosest since October 2005.

Surveyor confidence in house prices reached the lowest level since the records began in 1998 with market conditions having a depressing effect on sentiment.

It is hoped however the recent interest rate cut may see optimism increase in the coming months. Surveyors reported price falls across all regions in England and Wales, with the most visible in the East and West Midlands.

Scotland was the only UK region in the survey where surveyors reported a positive trend in house prices. RICS spokesman Jeremy Leaf said: "It is clear that the housing market continues to feel the strain of depressed market conditions.

"The recent credit crunch continues to hit confidence in the market, with Chartered Surveyors feeling the most pessimistic about price expectations since 1998.

"However, while underlying economic fundamentals remain sound and the labour market remains strong, large falls in prices remain unlikely.

"Employment would have to fall sharply before enough supply entered the market to create a significant dip."