New evidence of the disastrous effect the lack of mortgage funding is having on the housing market emerges this morning. The average number of homes being sold by each estate agent has fallen to a 30-year low of 11.5 a month, new figures from the Royal Institute of Chartered Surveyors show. London agents have been the worst hit, with surveyors in the capital reporting only eight sales a month. One surveyor reported that most of his business now comprised the selling of repossessed properties.

The scale of the house price falls was further illustrated by Knight Frank, the estate agent, which said that it expected house prices to fall to levels last seen in 2003 - wiping a further £45,000 off the current average house price of £185,625 and leaving two million people in negative equity.

Meanwhile, homeowners were dealt another blow last night as Nationwide Building Society, set to be Britain’s biggest independent mortgage lender, said that it was raising rates and withdrawing deals for all but the most cash-rich buyers. The lender said that it was increasing its rates by up to 0.61 percentage points and said that it would offer new deals only to borrowers who had a 15 per cent deposit.