House prices reached their worst point since the housing market crashed in the early 1990s, the Royal Institution of Chartered Surveyors (RICS) said today.

The number of surveyors reporting a drop in house prices exceeded those reporting rises by 54.7 per cent in January, the sixth consecutive month that falls have outnumbered gains.

January’s negative balance is the highest since November 1992, which reached 60.1 per cent after increasing for five months in a row.

In December the figure was 49.1 per cent, up from 3.1 per cent in August.

The average number of unsold properties per surveyor has grown by more than 40 per cent since September, reaching 85, the highest since February 1999.

Analysts said that the survey would spark more fears of a sharp housing market correction.

Howard Archer, the chief UK and European economist for Global Insight, said: “The very weak January RICS survey will heighten concern that the housing market is headed for a sharp correction in the face of stretched affordability and tighter lending practices resulting from the credit crunch.”

RICS said that a slowing in demand for property as opposed to a lack of supply was behind the price falls, as the credit crunch deterred would-be buyers from entering the market.

Jeremy Leaf, a spokesman for RICS, said that banks had to pass on the Bank of England’s 0.25 per cent rate cut to borrowers if demand was to be stimulated.

He said: “A lack of demand and confidence in the housing market is clearly behind the recent price slowdown. Tightening mortgage lending criteria is a block to many who are keen to take the housing market plunge.

“Agents are finding it difficult to market properties to an audience which has decided to watch the current economic theatre from the wings.”

He added: “However, if mortgage lenders filter the recent interest rate cuts into the market, demand should begin to increase.

“In the near term, the housing market will continue to be shielded from significant price falls while employment conditions are strong. The market need only fear a significant fall in prices if job losses start to multiply.”

The effects of falling prices were felt most in Northern Ireland, where the balance was 88 per cent, the North of England (72%) and the North West (66%).

Scotland was the only region that bucked the trend, with five per cent more surveyors reporting gains than losses.

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