The RICS has forecast that house prices will fall by 10 per cent in 2009, but said that sales volumes would climb by the same amount.

That would produce an eventual price drop of 25% from the peak recorded in the summer of 2007 - the biggest ever.

The annual forecast from RICS suggests that property sales may have bottomed out and could rise by 10% during 2009.

'The numbers are going to get worse before they get better', said RICS chief economist Simon Rubinsohn.

'Lenders are likely to remain cautious in the near term in the absence of any guarantees on mortgage backed securities.

'This, coupled with an increasingly gloomy economic picture, suggests that house prices will continue to decline in 2009.'

'It is likely that there will be even fewer new starts in 2009 leading to a very real risk that a serious housing shortage will fuel another bout of volatility once the current crisis eases.'

The RICS says it expects the authorities will cut interest rates by a further one percentage point in the first quarter of 2009, from 2% to just 1%.

But any revival in the market will also depend on the effectiveness of the various government programmes aimed at providing more help to the banks, so they they can start lending again on less restrictive terms than at present.

'As yet, however, there are few signs of improvement in lending behaviour,' it warned.