Property professionals have blamed the slowdown of the second home market for growing pessimism in the region's housing market.

The Royal Institution of Chartered Surveyors (Rics) said nationally eight per cent more of its members reported a fall than a rise in property prices in July – the first time the survey has recorded a fall in house prices since July 2009.

While the market is slowing in the South West, the region managed to buck the trend as two per cent more surveyors reported price rises than falls. This compares with a net balance of 15 per cent reporting rises last month.

Rics said the fall came as supply outstripped demand, with a decrease in buyer numbers for the second month in a row while more sellers flooded onto the market.

Its July survey also indicated prices were likely to decline further, with the worst reading for expectations since last spring.

Rics said 28 per cent more surveyors forecast prices to fall over the coming months, up from six per cent in June. Pessimism was just as rife in the South West as 25 per cent of surveyors predicted a fall.

The survey prompted economists to argue that the public's fear over deep public sector spending cuts was hitting consumer confidence.

Agents in Devon and Cornwall pointed to a number of factors for slowing conditions.

Timothy Garratt of Rendells in Chagford, Devon, said: "Job security is affecting the market, with people staying put.

"The second home market has dried up. Interest from upcountry buyers is reduced, affecting the mid-to-top end of the market."

David Dark of Seldons in Bideford said: "Since the budget, the rate of sales growth has slowed. However, viewing rates are holding up well so we're confident that the number of sales will increase again. The increase in supply of available properties has made the market very price sensitive."

Jeff Cole of Cole Rayment and White in Wadebridge, Cornwall, said: "A rise in instructions coupled with some fear and uncertainty over jobs has affected confidence.

"This also comes with some of the media coverage and scares of a possible double dip recession."

But the report suggests the market will remain buoyant as eight per cent more surveyors said they expected the number of sales to rise rather than fall.

The Rics figures contrast with an upbeat report, also out today, from the National Association of Estate Agents (NAEA), which found the market enjoyed its strongest month of the year in July.

It said both demand and supply increased, with the average agent seeing 292 registered house hunters in July, up from 279 in June.

Lender Halifax also sparked cheer last week when it said prices bounced back by 0.6 per cent in July, reversing the slump seen in the past month.