The drop in prices is the biggest since 1995 and is believed by the report to be a reaction to interest rates rises - up three times in four months.
The survey also reveals that buyer enquires across the country are down for a fifth consecutive month. There has also been a continued downturn in sales, falling 14 per cent over the past year.
Looking ahead surveyors predict a period of stagnation with sales activity levelling out.
RICS national housing spokesperson Ian Perry says: “The Bank of England is getting what it wanted. The housing market is slowing down with the economy after consistent interest rate rises over the past year.”
He continued: “The medicine is working. The slowdown is desirable from the point of view of market sustainability and may mean that further rate rises are unnecessary for the time being.
“While consumers keep confidence in job security and the economy we don’t expect large price falls.”
Paul Smith, chief executive of Spicerhaart, said: “Interest rate rises have cooled the housing market but not to the extent indicated in the RICS survey.
“The Institute largely bases its findings on a panel of small independent companies who will naturally feel the effects of a slow in activity more acutely than larger operations. This can give a slightly jaundiced view of the market when the reality is that sensibly-priced properties are selling."
