Homebuyer enquiries have fallen in each of the last five months, with all parts of the UK now seeing a downward trend, according to the Royal Institution for Chartered Surveyors (the RICS).

The professional body said that supply of homes for sale is still low, with new instructions still ‘in decline’ and stock levels at ‘historic lows’ – estate agents now have an average of just 34 residential properties on their books.

The sales market is losing momentum too, added the RICS, with agreed sales down for the fifth month in a row. Near-term expectations for sales are now firmly negative among surveyors.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “The market is starting to turn. Buyers are packing up and going home, as mortgage rate rises prove to be the final straw. Prices have been held up by a dearth of properties for sale, but agents are increasingly convinced that they will drop over the coming year.

“Buyers are getting cold feet, with worries that they might be getting in at the worst possible time – with prices near the top of the market, mortgage rates rocketing, and the cost of running a property rising horribly too. Even if they want to go ahead with a purchase, mortgage lenders may throw a spanner in the works, deciding the loan they need is now out of reach.”

Prices still rising, for now

Despite the sales slowdown, surveyors still expect house prices to rise over the next three months, supported by the lack of supply.

Although they expect the pace of growth to continue to slow and expectations for house prices over the next 12 months have now turned negative.

Coles added: “Once potential buyers get the sense that the market is turning, the pressures will intensify, because they feel that by sitting tight, they can wait for mortgage rates to ease and prices to drop back.

“This will feed more price falls, and more people putting off a purchase, creating a vicious circle for the market. The risks are growing that we could see substantial price falls in the coming months.”