The slowing economy is set to hit the housing market over the coming months, a new survey has predicted.

The Royal Institution of Chartered Surveyors residential housing survey has found that in the three months to the end of September 38 per cent more surveyors reported seeing price increases than decreases, a decline in confidence on the 49 per cent recorded in August.

With economic confidence dented by the events of September 11 and the slowdown that had begun even before the terrorist attacks, the survey shows that chartered surveyors expect to see falls in sales in the coming months. Fifty seven per cent more are expecting to see a fall than a rise, compared with just four per cent last month.

The figures also reveal that 19 per cent more surveyors expect to see prices fall than rise over the next three months, a marked decline on the balance of 20 per cent expecting price rises in August.

Highlighting the impact of the terrorist attacks in America last month, the statistics also show that the number of enquiries from prospective buyers fell away sharply in the days following September 11. However, they were picking up again by the end of the month, the surveyors reported.

There were also signs of a north/south split in the market, with the south showing a more marked slowdown in prices, while the housing market in the Midlands and North were more robust. The slowdown in the south may reflect the higher prices in the area, said the RICS.

RICS spokesman Ian Perry, said the international situation and the global economy would be a major factor over coming months.

"We originally forecast a downturn for the housing market in the autumn because of the expected slowdown in the economy, coupled with recovery in the early part of 2002. We can now expect to see that recovery delayed until the spring or possibly the summer of next year," he said.