House prices, property demand and supply are all dwindling, which RICS blamed on stuttering Brexit negotiations.
Its UK Residential Market Survey found that more surveyors saw prices fall rather than rise in October, with prices falling in the South East in particular.
Simon Rubinsohn, chief economist at RICS, said: “Although the tone of much of the newsflow surrounding the housing market remains downbeat, this continues to disproportionately reflect developments in the South and East of England with the picture remaining rather more resilient in many other parts of the country.
“Uncertainty about the economic outlook on the back of the never-ending Brexit negotiations appears a key drag on sentiment according to respondents to the survey.
“Meanwhile, the announcement of the extension of Help to Buy, albeit in a narrower format, should continue to underpin the new build market in the near term.
“Whether it, alongside other measures recently announced including the lifting of the HRA cap, is sufficient to drive housing starts up to the government’s 300,000 target over the coming years remains to be seen.”
The weaker trend in prices is being driven by the lack of demand from new buyers, which RICS said is in part a result of heightened political uncertainty, ongoing affordability pressures, a modest upward move in interest rates and a lack of fresh stock coming onto the market.
In October, 14% more surveyors reported a fall in buyer interest, which is the third report in a row in which demand has deteriorated.
In terms of new instructions, and the supply pipeline, virtually all UK regions saw a further decline as average stock remains very close to an all-time low. Furthermore, there appears little chance of any meaningful turnaround, as a net balance of 30% of surveyors reported the number of appraisals to be down on year-on-year basis.
Given these conditions, it is little surprise that sales remain subdued, with the third consecutive monthly decline in transactions. In fact, sales were reported to be either flat or negative across 11 of the 12 UK regions/countries during October.