"Demand for properties has dropped significantly since Brexit, as prospective buyers wait to see how it affects markets and their own finances."
Net balances for new buyer enquiries, agreed sales and new instructions all remained "firmly negative", according to the survey.
New buyer enquiries "declined markedly" during July, with virtually all areas of the UK experiencing a dip in demand.
Sales volumes also "declined sharply" with 34% more respondents reporting a fall in sales. The monthly pace of decline is the fastest since 2008.
Market uncertainties following the referendum, but also recent tax changes, are frequently highlighted as contributory factors to the slowdown. Nevertheless, comments left by some agents suggest activity has picked up after an initial wobble, while others cite the Brexit vote as having only a modest or even negligible impact.
Going forward, sales expectations now point to a broadly stable trend over the coming months. RICS says London has seen a "notable turnaround" in sentiment for the year ahead, as confidence towards the outlook for transactions climbed to seven month high.
Stephen Smith, Director, Legal & General Housing Partnerships, commented: “The latest RICS survey shines a much more positive light on the housing market, especially compared to the pessimism we saw last month. Yes, the rate of growth has slowed - but the market remains buoyant. Slow growth is not no growth! Confidence in the market is high, demonstrated by a rise in remortgaging as more borrowers are seizing the opportunity to take advantage of record low mortgage rates.
“On the basis of these figures, the ‘slowdown’ of recent weeks could just as easily be attributed to the time of year as to the impact of Brexit.”
Andrew McPhillips, Chief Economist at Yorkshire Building Society, added: “Demand for properties has dropped significantly since Brexit, as prospective buyers wait to see how it affects markets and their own finances. If this slump becomes more pronounced, it could cause a short-term drop in prices which may see the market self-adjust as buyers look to make the most of the reductions.
"Such an increase in demand would ultimately push house prices back up again so the market may remain volatile in the coming months. But people’s desire to own a home remains strong and combined with the underlying lack of supply that should support house price growth in the long-term.”
