UK house prices declined in September for the second consecutive month in response to decreasing demand, said the Royal Institution of Chartered Surveyors (Rics).

According to research, 14.6 per cent more chartered surveyors reported a decline rather than a rise in house prices, making it the quickest decline since September 2005.

Surveyors in East Anglia, the Midlands and Wales reported the largest price falls.

"The combination of rising interest rates, the introduction of home information packs and volatility in the financial markets resulting in tightening of lending criteria, has certainly affected the confidence of buyers and sellers," said Rics spokesman Jeremy Leaf.

He went on to say that as a result some would-be buyers are renting instead. However, Rics remains optimistic that due to a strong economy and employment conditions, and demand for houses will stabilise again.

In response to the Rics report, the Intermediary Mortgage Lenders Association commented that a fall in house prices is "inevitable" following the recent financial disruption but the figures do not mean the industry is likely to crash.

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