Sliding property prices caused by weaker demand, says RICS

More chartered surveyors questioned for the October RICS UK Housing Market Survey reported falling rather than rising residential property prices in October, largely due to a fall in demand for homes to buy, caused mainly by a continued lack of mortgage finance.

Chartered Surveyors' sentiment over residential property prices continues to worsen, with 49% more surveyors reporting prices fell rather than rose in October - the lowest reading since April 2009.

The latest fall in property prices reflect weaker residential buying demand and an increase in the number of homes available for sale in recent months.

However, while residential demand fell, the volume of homes coming onto the market also dropped in October, following significant monthly gains in housing supply between July and September.

The number of newly agreed sales also fell in October, but looking forward, sales transaction levels are expected to rise, once more.

On a regional basis, all 12 areas within the UK recorded declining residential property prices with values in Scotland finally falling on a month-on-month basis, following 15 months of consecutive gains.

Within England, the East Midlands recorded the lowest fall in property prices, while homes in the North West showed the largest decline in October. Property prices in Northern Ireland are also falling at a rapid rate.

"With both supply and demand falling, transaction activity is set to remain at relatively flat levels for the foreseeable future," RICS spokesman Jeremy Leaf said in a statement. "A subdued housing market is not good news for an economy which requires a high degree of mobility to take advantage of job opportunities."