House prices are suffering from an over-abundance of property on the market, Clear Property Investment can reveal.

This is exacerbated by the fact that thousands of potential buyers have been finding it almost impossible to get mortgages, according to the latest report from the Royal Insitution of Chartered Surveyors (RICS).

Nearly half of surveyors who took part in the RICS survey said they had encountered falling house prices in September. A total of six per cent reported a rise.

Meanwhile the Council of Mortgage Lenders (CML) reported an eight per cent drop in the number of mortgages approved in August while the number of re-mortgages fared worse with a 13 per cent drop to 25,000.

The East and West Midlands appear the two areas worst hit by falling house prices over the last quarter. Scotland was one of the more optimistic regions although more surveyors still reported price falls as opposed to increases.

RICS spokesperson Ian Perry said: "The fresh influx of property to the market combined with a lack of buyers remains the key problem affecting the sector. First-time buyers are in particularly short supply as the high deposits required by lenders prevent them from taking their first steps on the property ladder.

"Many areas are reporting a correction rather than dramatic falls in prices and vendors who are prepared to be realistic with pricing are still able to achieve a sale."

According to the CML survey first-time buyers had been particularly badly hit in August with a drop of five per cent, or 18,300. The declining numbers have been blamed on a demand for high deposits, with most lenders insisting on a figure around the 25 per cent mark.

This prompted Professor Steve Wilcox, Chair of the Centre for Housing Policy at York University to state that first-time buyers had been excluded from the market year-on-year.

A survey by the Council for Mortgage Lenders (CML) reported back in 2009 that four out of five first-time buyers under the age of 30 received cash from their parents to make up a deposit.

The average age of an unassisted first-time buyer is now 36 (up from 33 in October 2007 when the Credit Crunch began).

*We are returning to the situation last seen in the 70s, when most people rented private or social housing, and were just waking up to the idea that they could buy," said Prof Wilcox.

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