UK house prices dropped by more than expected in July with consumers becoming increasingly cautious as Brexit looms.

The Royal Institution of Chartered Surveyors (Rics) said prices continued to fall last month as the property market showed signs of flatlining amid the rising risks to the economy from a no-deal Brexit.

The Rics house prices balance, which measures the number of estate agents and property surveyors expecting rising prices against those expecting declines, dropped to -9% in July from -1% a month ago. City economists had forecast a reading of -1%.

Simon Rubinsohn, Rics chief economist, said house prices and sales volumes appeared to be losing momentum as Brexit and political uncertainty heighten. “All the key indicators pretty much flatlining,” he said.

Analysts said the increasing likelihood of Britain leaving the EU without a deal this autumn was holding consumers back from buying or selling a home. Retailers have also warned of households reining in their spending on bigger-ticket items against a backdrop of mounting Brexit risks to the economy.

The latest snapshot from Halifax, published on Wednesday, also suggested that house prices fell in July. Britain’s biggest mortgage lender said the average cost of a home dipped by 0.2% in July after a drop of 0.4% in June.

House prices remain high relative to incomes, with growing numbers of young adults unable to get on to the property ladder. According to government figures, the number of people aged between 20 to 34 living with their parents has soared by 24% over the last decade to as many as one-in-four – about 3.4 million people.

The average price of a home in Britain has dropped by almost £600 in the last three months to stand at about £236,120. However, affordability remains stretched – with the cost of a typical home about eight times higher than average wages.

Russell Galley, managing director at Halifax, said there had been a drop in the number of properties being sold. However, new buyer enquiries were rising, as wage growth accelerates and as the Bank of England holds interest rates close to the lowest levels since the financial crisis.

“While economic uncertainty continues to weigh on the market, the overall trend actually remains one of comparative stability,” he said.