House prices fell for the first time in a year last month, as the supply of properties reached a three year high while demand dwindled, according to RICS.
Its figures showed 8% more surveyors in July reported a dip in house prices than a rise.
This is the first time since July 2009 that more surveyors have seen falling rather than increasing property values and is the lowest reading for over a year.
By comparison in June, 8% more surveyors said house prices were going up than down.
The only areas to see notable price rises in the past month were London and the North West.
RICS said demand for property fell for the second month in a row, as potential buyers grew increasingly cautious due to uncertain economic prospects and difficulty in securing mortgages.
In contrast, 33% more surveyors reported a rise rather than a fall in the number of new properties coming to market, up from 28% in June.
This is the highest reading since May 2007, the month before the initial planned launch of HIPs.
Expectations for future house price increases also turned negative in July, with 28% more surveyors expecting prices to fall over the coming months, up from 6% in June.
Despite this, sales expectations remain positive, with 8% more surveyors expecting sales to rise rather than fall, although this is down from the previous month.
Ian Perry, spokesperson for RICS, says: "The fall in the RICS house price measure is broadly consistent with most other recent data that has been released. This is a reflection of both the increase in supply following the scrapping of HIPS and the more cautious stance from buyers.
"Significantly, the forward looking price expectations numbers suggest that this softer trend will continue through the second half of the year. However, agents are still generally optimistic about sales activity which should benefit from more realistic pricing of properties."
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