Property sales in the UK could fall by as much as 40% this year, the Royal Institution of Chartered Surveyors (RICS) has warned.

The organisation also predicted that house prices would fall by 5% in 2008, which in turn would cut consumer spending by 8%.

"Money looks set to remain tight and many will continue to find that access to the market is restricted by cautious lenders," said Simon Rubinsohn, chief economist at RICS. "This could have important ramifications for the wider economy."

There are signs already that the slowdown in the housing market is hitting businesses dependent on that sector, such as estate agents, removal firms and surveyors.