Property sales are expected to pick up as experts predict a 10% fall in the price of homes over 2009.

The average cost of a home will drop by at least 25% from its 2007 zenith, according to the Royal Institution of Chartered Surveyors (RICS).

A hostile lending environment and an increased downturn in the economy look set to prompt further house price falls over the next year, but the RICS said its housing market surveys suggest activity levels may have bottomed out. The trade body is confident enough to predict a possible 10% increase in sales over the next 12 months.

In recent weeks, the number of new buyers making enquiries rose to its highest level since 2006, though RICS believes this will only be translated into actual sales if the mortgage market improves.

The number of mortgage approved by lenders is currently at around 30,000 a month, a huge drop from the 129,000 seen at the height of the housing boom.

The Government has now been urged to implement proposals put forward by former Halifax Bank of Scotland chief Sir James Crosby, that the Government should temporarily provide support for the mortgage backed securities market in as bid to increase the flow of mortgage lending.

RICS chief economist Simon Rubinsohn said: "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. However, transaction levels do seem to have hit a floor with some signs that opportunistic investors are returning to the market.

"We expect a modest rise in sales over the course of the next year from the very low levels seen in recent months."

The group also warned the number of new homes earmarked for construction looked set to continue to drop off during 2009, with only around 110,000 new housing starts expected during 2008, a figure far lower than those recorded during the 1990s recession.

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