Real Video: Gary Keown takes a northern perspective on the housing market

Pessimism about jobs, the weather and the traditional holiday slowdown have all contributed to the market going off the boil, according to the Royal Institution of Chartered Surveyors' (RICS) survey for England and Wales.

Homeowners are having to put their properties on the market at more realistic prices

Activity in the market, measured by the number of homes sold, continued at a low ebb partly because of the start of the holiday season, said RICS.

There was also a slight fall in the number of homes coming onto the market, although the first half of the year overall saw the largest increase in the number of homes for sale for three years.

Real Video: Patrick Bartlett looks at the state of the housing market in London

The RICS said there was a continued shortage of good quality properties and many of its members noted homebuyers were resistant to paying inflated prices.

Southerners suffering

Its survey, based on responses from 232 chartered surveyors, said that this time London, the South East and East Anglia were being hardest hit by economic uncertainty instead of the North.

The balance of surveyors reporting rising prices was 16.4%, down from 29.3% in June and the weakest position for two years.

RICS spokesman Ian Perry said the North-South divide was clearly evident, but he added that it should not be forgotten that the South had benefited from a sharp rise in house prices since 1995.

"Taking the broader picture, the national market should benefit from low fixed-rate mortgages and steady wage growth," he said.

"In the short term, the Bank of England's commitment to bringing down underlying inflation by maintaining interest rates at current levels will almost certainly slow housing market activity.

"But the key to an active market is consumer confidence - this fragile commodity has been steadily eroded over recent months and will not be helped by a further slowdown in economic growth during the rest of 1998."