A record number of surveyors reported a drop in house prices and property transactions last month, new figures show.

The balance of surveyors reporting that house prices had fallen rather than risen increased to 95.1 per cent last month, up from 79.4 per cent in March, figures from the Royal Institution of Chartered Surveyors (RICS) show. This is the biggest margin since the figures were first compiled in 1978.

Transactions also slowed sharply as first-time buyers struggled to secure funding. Surveyors reported an average of 18.3 property sales in April, down from 22.2 in March, matching the record low set in November 1992.

The dire state of the housing market will heighten fears of a further slowdown in consumer spending as new figures show that like-for-like high street sales fell by 1.5 per cent in April, after a 1.6 per cent decline in March.

Data from the British Retail Consortium shows that clothes sales during April were the weakest in eight years, despite heavy discounts by retailers.

Sales associated with home sales, such as furniture and flooring, slipped to a near three-year low. Sales of large electrical items also slipped.

However, food sales rose as the cold weather boosted sales of pies and pizzas.

Ian Perry, of RICS, said: “The real issue is the collapse in the number of housing transactions. This has very real implications, not just for the property industry but also the high street and the wider economy. Sales of white goods are likely to suffer if this low level of turnover persists for much longer.”

Activity in the housing market is being hampered partly because of increasingly onerous demands by mortgage lenders keen to protect their margins in the wake of the credit crunch. Lenders are demanding hefty deposits from home buyers and interest rates have soared in recent months, making it difficult for cash-strapped first-time buyers to get on to the property ladder.

The average interest rate on a two-year fixed-rate deal for a borrower with a 5 per cent deposit rose by 0.4 per cent to 6.81 per cent, new figures from the Bank of England show.

Those hoping for a speedy recovery in the housing market may be disappointed. Price expectations for the next three months among surveyors fell to the lowest level since the series was included in the RICS data in 1998, with a balance of 80 per cent of surveyors expecting falls rather than rises. New buyer enquiries also slumped to the lowest level since 1999, when this information was first included in the RICS survey.

Every surveyor questioned in the North, the North West and East Anglia said that prices were falling rather than rising. However, RICS said that price falls were relatively modest because of a lack of available houses. It said that numbers of “distress sales” - homes put on the market because of repossession or forced sale - were still low.

House prices in Scotland, which have been resilient so far, also showed signs of weakening.

John Halman, of Gascoigne Halman, a chartered surveyor in Wilmslow, Cheshire, said: “No credit, no customers, no confidence . . . It's time to hold your nerve.”

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