Up to 1,800 estate agents may go bust by the end of the year unless lenders ease up their squeeze on new mortgages, as fears grow that the UK is heading for a full-scale housing crash, with price falls of up to a fifth.

The BCC survey reports that average UK GDP growth is forecast to collapse from 3 per cent last year to 1.7 per cent this year, and then 1.6 per cent next year. The combination of falling house prices and higher fuel and food costs is leading to a squeeze on personal spending; this year is likely to see household consumption growth fall to 1.1 per cent.

Figures from the National House-Building Council, disclosed yesterday, showed that the number of applications from builders to start new homes in the UK fell by almost a third year on year, with Northern Ireland worst affected. According to the Ministry of Justice, the number of repossessions rose to 27,530, up from 23,438 last year.