The National Association of Estate Agents reported that 43 per cent of agents said business slowed down last month. Nearly half the agents in the survey said that there were drops in inquiries from buyers, the number of viewings and the number of offers. But agents reported a shortage of all types of homes to sell.
The number of completions in June was steady due to the more active market at the begining of the year.
Another survey - by the Federation of Master Builders - showed that the construction industry's workload was still falling, although the rate of decline had slowed.
Ted Evans, president of the FMB, said: 'There may be signs of encouragement but it is obvious that any recovery will be a long and hard process. Margins remain tight or non-existent.'
He added that firms were still reporting low levels of work during the second quarter especially in the public sector. Repair and maintenance in the public sector fell substantially.
Eva Lomas, president of the National Association of Estate Agents, said the latest tax rises and uncertainty over interest rates meant that people were moving only when absolutely necessary.
'They are not rushing to move up the housing ladder and improve their lot as they did in the 1980s but are staying put until they can see a real upturn in the economy and a subsequent increase in the value of their home.' Ms Lomas works in Bolton, Lancashire, where the traditional holiday viewing season has already begun. 'It's normally quiet at this time of year. We hope this is just a blip.'
Tony Williams, from Telford, Shropshire, said there was more competition for cheaper properties. Fewer repossessions were coming on to the market and people were begining to think it was more economical to buy than rent.
The FMB's Mr Evans called on the Government to tackle the rise in the black economy which the federation claimed was destroying legitimate business.Reuse content