Falls in house prices across the country may now be at their most severe since the property slump of the early Nineties, according to bleak figures today suggesting that Britain's housing downturn is gathering pace.

A highly influential barometer of housing market conditions reports this morning that 49.1 per cent more surveyors found that house prices fell last month than saw them rise.

The gloomy result is the worst since November 1992 in the closely watched poll carried out by the Royal Institution of Chartered Surveyors (RICS), when this “negative balance” fell as far as minus 60.1 per cent. December's figure compares with a negative balance of 40.6 per cent of surveyors who reported that prices were on the slide in November.

With virtually every other reliable indicator of the housing market also pointing to grim conditions and falling prices, today's RICS report will deepen already intense gloom over prospects for homeowners this year.

The RICS finds that confidence among surveyors in the outlook for both sales and prices fell last month to their lowest levels in a decade.

House prices are seen to be falling in every area of England and Wales - although the results suggest that they rose slightly in Scotland. The heaviest falls appear to be taking place in the West Midlands and East Anglia, according to the survey's findings.

Anxieties are being heightened by a growing build-up of unsold properties on estate agents' books, with stocks of homes up by a further 7.1 per cent in December, on the heels of a 9.1 per cent leap in the previous month, according to the RICS data.

The survey's findings suggest that this increase in stocks - which threatens to act as a drag on house prices - may get worse, with December bringing a rise in new instructions by would-be sellers putting their homes on their market at the same time as demand remains seriously subdued.

The number of new instructions to sell properties climbed last month, with a net 4 per cent more surveyors reporting that these rose rather than fell, the RICS reports. That compares with a balance of minus 7 per cent in November. There were scant signs of improvement in demand from potential buyers, with 25 per cent more surveyors saying than buyer inquiries fell last month than said they had risen.

The surveyors' body said that the overall balance of supply and demand last month indicates the loosest market conditions since August 2005, during the last serious setback for the property market.

Demand from buyers may be being sapped by the toll from the credit squeeze, as mortgage lenders toughen their criteria for making home loans and reduce the amounts they are willing to allow housebuyers to borrow.

Ian Perry, a spokesman for the RICS, said: “The housing market is clearly feeling the pinch from the credit crunch and the round of interest rate hikes in 2007.” However, he argued that while sentiment “appears to have reached it lowest ebb” economic conditions now were vastly different from those that aggravated the housing downturn at the start of the last decade.

Simon Rubinsohn, the RICS chief economist, drew some comfort from the survey's finding that demand in the market, although still falling, was not declining as sharply as previous results suggested. “It doesn't mean that we are over the worst - but we may at least be finding a floor,” he said.

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