Agents selling only one home a week

The average estate agent sold only 12.7 homes in the three months to the end of August, with some agents admitting they struggled to sell even one property a week, the Royal Institution of Chartered Surveyors (RICS) said.

The news came as figures showed the number of first-time buyers getting on to the property ladder had sunk to a record low, while the head of the UK's biggest building society warned house prices could lose 25% of their value from their peak.

RICS blamed the lack of sales, which were the lowest recorded by the group since its survey began in 1978, on a combination of the mortgage drought and speculation surrounding the Government's recent announcement on stamp duty.

Rumours about a stamp duty holiday circulated for much of August, causing people to delay making a purchase, before the Treasury finally confirmed last week that it was suspending the tax on properties worth up to £175,000 for one year.

But the move received a subdued welcome, with most commentators saying it would do little to improve activity, adding that boosting mortgage liquidity was key to getting the market moving again.

RICS spokesman Jeremy Leaf said: "A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery. While money is scarce, many will continue to be denied the next step on the property ladder."

Other market indicators reported by RICS remained grim, with the number of inquiries from new buyers stalling following a modest rebound in recent months, while 81% more surveyors reported house price falls than those who saw a rise - close to a low of 94.9% seen in April this year.

Meanwhile, figures from the Council of Mortgage Lenders showed just 17,300 people bought their first home during July, 48% fewer than in July last year and the lowest level since its survey began in January 2002.

The combination of the mortgage drought and falling house prices is causing many would-be buyers to sit on their hands until the outlook for the housing market is clearer and mortgage rates have come down. Comments made by Nationwide's chief executive Graham Beale will have done little to lift sentiment among consumers, after he told the BBC the housing market was unlikely to start recovering before 2010, with house prices losing 25% of their value from peak to trough.