The number of homes changing hands has dived to a new record low, with estate agents selling an average of just one property a week, figures showed today.
The average estate agent made just 12.7 sales in the three months to the end of August, the lowest level since the Royal Institution of Chartered Surveyors' (RICS) survey began in 1978.
The group blamed the lack of activity 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.
Other market indicators remained grim, with the number of inquiries from new buyers stalling following a modest rebound in recent months.
In June and July surveyors said predatory buyers had been tempted into the market after many sellers dropped their asking prices.
But the group said today that the traditionally weak month of August had seen this interest stagnate.
The number of surveyors reporting house price falls eased slightly for the fourth month in a row, but with 81 per cent more surveyors reporting drops than those who saw a rise, the figure remained close to a low of 94.9 per cent in April this year.
On a brighter note, the number of new instructions to sell property edged closer to positive territory, but RICS said the figure remained low in the absence of high levels of sales by people unable to keep up with their mortgages.
Overall, 2 per cent more surveyors reporting a fall in properties coming on to the market compared with those who saw a rise, down from 3 per cent more who saw a fall in July.
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.
"The Government's stamp duty policy will not be enough to kick start transactions and is more likely to assist buy-to-let investors with better access to finance than the first-time buyers it was aimed at. More needs to be done to reinvigorate a market whose confidence has taken a severe knock."
He added that in the absence of much activity in the market, many homeowners were being forced to rent their properties while they waited for lending criteria to be loosened and demand to pick up.
Surveyors remain pessimistic, with most expecting sales to fall further.Reuse content