Falling house prices hit record level

House price falls have hit a historical level exceeding the falls seen in 1990 when prices crashed, according to a new report.

The Royal Institution of Chartered Surveyors (RICS) says the only thing preventing more significant falls is a lack of new supply of homes. However, it says a house price crash remains unlikey.

RICS’ figures for March show house prices are now falling at the fastest rate since it starting keeping records in 1978.

The falls are especially prominent regionally, with more chartered surveyors reporting falls in the East Midlands and East Anglia than rises. Scotland remains the only UK region to be experiencing rises in prices, according to the survey.

RICS says the falls are the result of many buyers being unable to get a mortgage or sell their existing home. It also warns that these problems show no sign of abating unless mortgage rates become cheaper.

Jeremy Leaf, RICS spokesman, said: “Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight.

“The slowdown in prices is directly attributable to a lack of available finance which has hit demand.

"However, until new supply increases dramatically a significant crash remains unlikely.

"The next six months will be a crucial period for homeowners.”

Gordon Brown and chancellor Alistair Darling are due to meet with mortgage lenders later today to discuss how to improve liquidity in the market and bring down mortgage rates.