This is according to the latest RICS UK Housing Market survey published today.
Continued lack of mortgage finance and a generally cautious attitude from purchasers resulted in new buyer enquiries continuing to slip, with the net balance weakening to -12 from -2.
Meanwhile, instructions to the market, which have been rising more or less consistently since July last year, saw a sharp turnaround, with a net balance of -4% recorded in October compared with a +22 reading in September. This is the first drop in supply since January when the extreme weather conditions contributed to the very low level of new stock coming to the market.
Sentiment over house prices continues to worsen, with 49% more surveyors reporting house prices fell rather than rose in October. This figure compares to 36% in September; this is now at its lowest level since April 2009.
From a regional perspective, the East Midlands and East Anglia recorded the most negative price balances, while in Scotland the price net balance moved into negative territory for the first time in over a year.
The average number of stocks on surveyors' books fell to 67.2, down from 69.1. Completed sales fell to an average of 15.2 per surveyor, this is the worst reading since June 2009 and highlights the failure of transaction activity to benefit in a meaningful way from either from the current stamp duty holiday or the stronger than expected GDP data over the past couple of quarters.
Reflecting this, the sales to stock ratio, a good indicator of the underlying condition of the market, also fell to its lowest level since July 2009. Respondents to the survey report that the market is generally cautious, with many buyers signaling that they are going to wait until the spring to make a decision.
Commenting, RICS spokesperson, Jeremy Leaf said: "With both supply and demand falling transaction activity is set to remain at relatively flat levels for the foreseeable future.
“Agents may be cautious about what this could mean for house prices in the short term, but dramatic falls are likely to be limited by a gradual drying up of stock coming to the market.
"It is also worth noting that a subdued housing market is not good news for an economy which requires a high degree of mobility to take advantage of job opportunities."
