More houses were put up for sale in December 2011, but "unrealistic" asking prices are expected to hinder transactions, according to the Royal Institution of Chartered Surveyors.

The number of new instructions edged higher for the third month in a row, Rics said, suggesting more sellers were coming on to the market in time for the New Year.

London saw the biggest increase in supply, with new instructions rising to their highest level since January 2005.

But despite a slight increase in buyer inquiries, surveyors' expectations for future sales dipped from November and are now flat as a result of the "unrealistic price expectations" of some vendors.

The survey also suggested that house prices continued to fall in December, but at the slowest rate since June 2010. London was the only area to experience house price rises, while the West Midlands, Humberside and Yorkshire suffered the biggest falls.

A balance of 21% of surveyors expects further falls nationally over the next three months.

Rics housing spokesman Ian Perry said: "The increasing number of prospective sellers who placed their homes on the market in December is a positive development, as a lack of stock has been a big issue in some parts of the country.

"But with sales expectations remaining flat, it is important that vendors are realistic in their pricing if they wish the sale to go through in good time."

He added that sales expectations for coming months were also "fairly subdued" because of "continuing problems with the economy and the ongoing instability in the eurozone", which were weighing heavily on the housing market. The lack of mortgage lending was still acting as a drag.

The survey also revealed that sales activity "held up relatively well" in the final quarter of 2011 despite the gloom. The average number of completed sales per surveyor was 15.2 in the three months to December, which was slightly down on November's figure but still close to its best level since the autumn of 2010.