The Royal Institution of Chartered Surveyors (RICS) says the average number of transactions per surveyor fell to a record low in December, despite increasing buyer interest.
In its latest housing market survey, the trade body reveals the average number of transactions per agency over the last three months is now at 10.1, a drop from 10.6 in November, and the lowest figure since the survey began in 1978.
The balance of surveyors reporting house price falls decreased slightly in December with 73.5% more chartered surveyors reporting a fall than a rise in house prices, down from 75.8% in October.
London continues to suffer the worst, with surveyors reporting only seven sales per agency over the last three months, while surveyors in the South East and South West reported just nine sales in the same period. The most buoyant region was the East Midlands with 15 sales per surveyor.
The study found interest in the market remains upbeat, with 17% more surveyors reporting a rise than a fall in new buyer enquiries, up from 16% in November.
Ian Perry, RICS spokesperson, says: "Buyer interest is now at levels not seen since 2006 but without mortgage finance the housing market is at a standstill and transaction levels at an all time low.
"First-time buyers and owner-occupiers are now stuck in a market which does not fulfil their aspirations. The Government must act now to ensure that order is restored to the current chaos.
"A first step would be for the Government to provide guarantees for the new issuance of residential mortgage backed securities.
"Without this help there is a real danger that homebuyers will be frozen out of the market, transaction levels and prices will fall to new lows, repossessions will increase and negative equity will become common place. Together this has the potential to push the country deeper into recession."IFAonline
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