The UK saw the most widespread residential property price falls since May 2020 last month, as demand from buyers and sales activity slowed in the face of higher borrowing costs, the latest RICS UK Residential Market Survey shows.

RICS said that its house price net balance – which measures the difference between the percentage of surveyors seeing rises and falls in house prices – dropped to -25 in November, which is below the -10 which economists had forecast in a Reuters poll. Looking at the year ahead, the balance for price expectations was -61.

Price falls were particularly common in South East and South West England, while property prices continued to increase modestly in Scotland and Northern Ireland.

Estate agents will not be surprised to find that overall property sales were weaker, though the decline was less steep than in October, when many mortgage lenders temporarily withdrew products from the market.

The RICS survey is the latest in a long line of surveys to show that property prices are falling across most parts of the UK.

A Reuters poll of economists and property market analysts last month forecast house prices would drop around 5% next year, having risen about 24% since early 2020, according to official data.

In contrast to falling house prices, rents are set to keep rising owed to the widening supply-demand imbalance in the PRS, RICS said.

Simon Rubinsohn, RICS chief economist, commented: “The overall tone of the latest RICS Residential Survey is understandably more downbeat than previously, reflecting the uncertain macro environment and the higher cost of mortgage finance. However, anecdotal comments from respondents capture the very real significant divergences in market behaviour at a more localised level.

“Although the headline price balance recorded two consecutive modest monthly falls in prices, and the forward-looking series indicate that this trend will extend through the coming months, the likely ‘job-rich’ recession suggests the downturn in the housing market this time could be shallower compared with past experiences.

“Meanwhile, the imbalance in the rental market remains significant as landlord instructions continue to fall and is consistent with further increases in rents, even if the momentum does appear to be slowing just a little.”