ESTATE agents in South West Wales have seen sales slump by as much as 60 per cent.

They say they are selling fewer properties because mortgages are much harder to come by.

A lack of confidence in the financial markets has meant lenders are more cautious with their cash, leading to deposits of up to 20 per cent being required on some mortgages.

This has led to the number of mortgage approvals dropping, reducing the number of first-time buyers, slowing the market and dragging down house prices.

David Craddock, co-founder of Llanelli's Davies Craddock, admitted the outlook was not good, but dispelled suggestions of a market crash.

He said: "The drop in transactions has been evident here — the estate agency side of our business has seen a 60 per cent drop since last year and some of the estate agents have fared much worse.

"The fall in house prices is, however, less jarring than in other parts of the country.

"There will be more potential for first-time buyers who haven't been able to afford to buy to get on the housing ladder."

This year to date, the number of house sales in Britain has slumped to an all-time low.

New figures from the Royal Institute of Chartered Surveyors (RICS) stated that agents completed an average of 14.4 transactions in the last three months.

This is the lowest figure since the survey began in 1997.

Chris Hope, of Dawsons, called the figures a "readjustment," following the housing boom in the late 1990s.

He said: "There is no question there has been a significant reduction in the number of transactions for estate agents.

"While house prices have increased over the past 10 years, the lending criteria for homeowners were more relaxed than in 1991. Schemes like discounted tracker mortgages can only last for a finite period."

Mr Hope also said properties in Swansea were on average, around £30,000 cheaper than this time last year.

"I would say we are selling between six and eight per cent less than we did last year," he added.

"I do not believe we will see a housing crash, though. What is going on is more of a readjustment. It was bound to happen sooner or later."

Estate agents in Llanelli, Neath and Port Talbot also agreed.

Val Clements, branch manager of Astleys in Port Talbot, said: "I don't think there will be a shortage of mortgages, but there have been changes in lending criteria.

"People need between a 15 and 20 per cent deposit before some building societies will give them a mortgage."

But Mr Craddock pointed out that lower house prices could mean good news for some people.

"Houses in Llanelli that you would have expected to pay over £100,000 for a year ago can now be found for £80,000," he added.

However, RICS spokesman Ian Perry was less optimistic.

He said: "The lack of mortgage finance has brought the housing market to a virtual standstill with first-time buyers rapidly becoming an endangered species.

"The current confused messages from the Government regarding stamp duty risk damaging any returning confidence and may discourage mobility."