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A survey from the Royal Institution of Chartered Surveyors (RICS) showed the number of houses being sold across the UK during the three months to the end of September was the lowest since the survey began in 1978 and 52% lower than the same period last year.
Also, across the country, around 91% of estate agents reported seeing prices drop.
Lenders including the Halifax and the Nationwide reported price drops of 12% over the past year.
RICS spokesman Jeremy Leaf said: "As it stands, only those with significant finances are in a position to access the market.
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"The housing market continues to hold its breath and unless mortgage liquidity improves, the market is likely to remain a dormant beast for some time to come."
However the group are optimistic that yesterday's £37bn rescue package for the banks, which includes a commitment by the banks to increase lending to homeowners, could improve the situation.
There has been a slight improvement in the number of enquiries from new buyers with this figure showing an improvement for the fifth consecutive month to reach its highest level for 16 months.
Only 17% of chartered surveyor reporting a fall than a rise compared with the 27% more who reported a fall in August.
"The market has still yet to experience significant numbers of forced sales but surveyors are surprisingly optimistic that sales will increase over the next three months," said the RICS spokesman.
The Government's plans to temporarily raise the starting point for stamp duty to £175,000 on property sales is said to be a factor for improvements in enquires.
(GK/JM)
