Levels of home buying are still falling, but estate agents are seeing some early positive signs of recovery in the property market.

The Royal Institution of Chartered Surveyors’ (Rics) market survey for October points to a slight upturn in prices – although from an historic low.

The balance of Rics members seeing price falls over price rises was up from -84.5 to -81.8.

The main factor found to be depressing prices was the large stock of unsold properties and limited numbers of buyers – but not a surge in distressed selling, as a high number of recession-fuelled repossessions have yet to feed into the market.

The number of new instructions to sell fell.

And the number of completed sales per surveyor was down.

On average the number of sales per surveyor fell from 11.5 to 10.9 – the lowest on record since 1978 and a fall of 53.6 per cent on a year ago.

Surveyors had on average 80.7 properties on their books.

Rics spokesperson Ian Perry said: “Last week’s interest rate cut should certainly help to support the market now that lenders have agreed to pass on the reduction to borrowers.

“Even so the general lack of mortgage finance remains a major blockage in the housing market for a large majority of would-be buyers.”

Along with the two per cent drop in interest rates in two months, surveyors did see some glimmer of hope.

Twenty per cent more chartered surveyors expect an upturn in sales over the next three months, a rise from four per cent in September.

The rise in optimism is reflected in part by an increasing trend of vendors dropping asking prices, but may also be a sign that there are expectations of a jump in the number of repossessions.

“Many vendors have finally started to accept current market conditions and are dropping their asking prices to achieve a sale,” Mr Perry said.

“Sales should increase in the coming months as more and more sellers understand that greater realism is the only way to make that long desired move.”

The house price situation was most dire in the north.

All surveyors in the north reported price falls over the last three months – with most seeing house values down two to five per cent.

Edward Watson, a Rics member from Newcastle upon Tyne, said: “It has been a thin month with little discernable activity. The few buyers in the market are restricted by difficulties in raising finance from the mortgage banks.

“Consequently, those with cash are in a very powerful negotiating position and can obtain significant discounts, particularly at auctions or buying repossessed properties.”