The pace of house price falls may be steadying as the end of the year approaches, according to surveyors.

A net balance of 63% of property professionals reported house prices falling rather than increasing in October, edging down from a balance of 67% in September, the Royal Institution of Chartered Surveyors said.

Its report said the latest house price reading “suggests the pace of decline, from a national perspective, has levelled off in recent weeks. Nonetheless, the house price metric remains deeply negative across most parts of the UK, even if the latest readings have moved off the lows hit over the past couple of months in the majority of cases”.

Halifax data released earlier this week showed British house prices have fallen by around 4% since the middle of last year.

The Bank of England raised rates 14 times between December 2021 and August 2023 to a 15-year high of 5.25%. Last week, the BoE said interest rates would need to stay high for an extended period to tame inflation, which at 6.7% is the highest of any large, advanced economy.

“As such, mortgage affordability will remain stretched over the near term, leaving little prospect of a strong rebound in residential sales volumes, even if expectations have now moved away from cyclical lows”, Parsons said.

RICS said surveyors expected sales volumes to decline further over the coming three months, but to be broadly stable over the year to come.

House prices are still around 18% higher than before the start of the COVID-19 pandemic, when ultra-low interest rates and a greater demand for living space spurred demand in many rich economies.

Rents are expected to rise 4% over the coming year, as fewer landlords advertise property. Tenant demand continues to rise, albeit at the slowest pace since the second quarter of 2021.

Reflecting on the latest RICS report, Tom Bill, head of UK residential research at Knight Frank, said: “The story of this housing market slowdown is a double-digit fall in transaction volumes rather than a dramatic price correction. Buyers and sellers are both hesitant as mortgage rates normalise, which has kept price declines in check. Unlike the pandemic or mini-Budget, there is no single reason that activity is weak. Higher rates, the prospect of a general election, conflict in the Middle East and ambiguity over when the bank rate will peak are all sapping sentiment. We expect prices and sales volumes to bottom out next year as the economic backdrop stabilises.”

“Rental values continue to rise due to a shortage of supply and strong demand. Landlords have faced higher taxes and growing red tape in recent years, which means many have left the sector. As the Renters Reform Bill goes through Parliament, it is a reminder of the unintended consequences that government intervention in the housing market can have. What started as a politically-motivated attempt to deter landlords has become financially punitive for tenants.”