Despite this slump, the latest survey proved it is not all doom and gloom on the housing market with figures showing an improvement in levels of demand and sales. The results showed a 1.2 per cent increase in new buyer registrations and an 8 per cent increase in sales agreed.

Richard Donnell, Director of Research, said: “Some bounce-back in market activity was inevitable after what has been a prolonged period of weak market activity.

“However, the growth in demand over the last two months is only a third of the level seen in previous years, so the spring market is likely to be a non event this year. Indeed, the likelihood of any sustained increase in demand over the spring period is very limited.

“Continued uncertainty in the financial markets, affordability pressures and weak buyer confidence are all likely to suppress levels of market activity in the months ahead with pricing levels remaining under pressure.” Mr. Donnell concluded.

The news comes as more and more lenders withdraw and alter mortgage products, making it harder for millions of Britons intending to buy their first homes or remortgage.

Mortgage issues added to falling house prices, high stamp duty charges and expensive Home Information Packs (HIPS) are just some of the factors turning potential buyers to the rental market.

New research from Iammoving.com has shown that almost one in five home owners intending to move are considering selling and moving into rented accommodation as opposed to re-mortgaging. Simon Preston, chairman of Iammoving.com said:

“We could see that people were still moving but there was a shift towards renting. Our findings show that much of this is down to the problems in the housing market and the fact that people are struggling financially.

“You expect people to consider renting when the market is falling because there is a chance to make money, but 18 per cent is a high figure. The 14 per cent who indicated they might move to rented accommodation because they have money worries will find it hard to get back on the ladder if they spend too much of their equity.

“Many might not actually make the jump to renting because of difficulty in getting the price they hope from their current home.” Mr. Preston concluded.

© Fair Investment Company Ltd