A growing belief that property prices are falling is deterring both sellers and buyers, leaving UK housing-market conditions at their loosest since the mid-1990s, according to a survey published on Tuesday.

Simon Rubinsohn, the institution’s chief economist, said the figures indicated a downturn affecting all areas of the country, whereas the housing crash of the early 1990s had been skewed towards southern regions.

Rics said fewer homeowners were selling property in all regions except London, the South West and Yorkshire, while inquiries from new buyers were falling at the fastest pace in the 10 years it had records for. The level of completed property sales in the three months to April was a third lower than a year earlier, after 12 months of contraction.

But prospective buyers will be discouraged by toughening credit conditions. New Bank of England data show the rates that lenders quote for fixed-rate mortgages diverging further from official interest rates.