Today

House prices in the UK have fallen for a second consecutive month, figures from the Royal Institution of Chartered Surveyors (Rics) show.

Rics said 14.6 per cent more surveyors reported a fall in property prices last month than those who said there had been an increase.

This is the biggest difference since September 2005 when 19.4 per cent more surveyors reported a drop than a rise.

In August 2007, the figure stood at just 3.3 per cent.

Rics attributes the decline in prices to rising interest rates, the introduction of HIPs and the tightening of lending criteria.

Jeremy Leaf, Rics: "The combination of rising interest rates, the introduction of HIPs and volatility in the financial markets resulting in tightening of lending criteria, has certainly affected the confidence of buyers and sellers."

Enquiries from new buyers declined for the tenth consecutive month in September, Rics said.

East Anglia, Wales and East Midlands saw the largest house price declines last month.

Smaller falls were seen in the South East, South West, Yorkshire and Humberside and the North West.

Scotland and London, meanwhile, reported house price gains.

Rics spokesman Jeremy Leaf said: "Although house prices continue to fall, the underlying economy remains strong.

"A major correction in the market seems unlikely while economic growth is above trend and employment conditions remain buoyant."

He added: "The combination of rising interest rates, the introduction of HIPs and volatility in the financial markets resulting in tightening of lending criteria, has certainly affected the confidence of buyers and sellers.

"As a result, some would-be buyers are turning to the rental market whereas others, conscious that the next move in interest rates is now likely to be down rather than up and market meltdown is highly improbable, are seizing the opportunity to negotiate with more flexible vendors in a less competitive market-place."

Earlier this month, both the Halifax and Nationwide reported sharp falls in house price growth.

Halifax figures show that the average cost of a residential property in the UK is now £198,500.