A leading estate agent has said buyers and sellers are in a stand-off as both expect property prices to fall.

Chief executive of London estate agent Savills Jeremy Helsby told the Times: "People are not buying because they think that property will be worth less tomorrow: buyers and sellers are in a kind of Mexican stand-off."

According to Mr Helsby, properties in London, which have been traditionally strong when compared with the rest of the country, are starting to be effected by the economic slowdown, according to the paper.

The only properties immune from the slump are those in the super-prime bracket, worth in excess of £5 million.

And with mortgage lending down 44 per cent on last year, first-time buyers are finding it increasingly difficult to get into the market.

Pressure on borrowers can be felt on all sides as rates and arrangement fees have rocketed over the past few years, while the choice of mortgage products on the market has plummeted, having a direct effect on the property market, according to the Royal Institute of Chartered Surveyors.