A COLCHESTER estate agent revealed the Northern Rock crisis has left home buyers in north Essex "a little nervous", resulting in a temporary slowdown of the market.

The news comes after Barratt, which has three developments in Colchester, experienced a ten per cent drop in sales due to the problems.

David Boyden of Boydens in Crouch Street, said he expected Boydens' September property sales to be down on the same period last year.

A number of factors have caused the slow down, he said, but Northern Rock - which suffered cash-flow problems this summer - was definitely one of them.

"The interest rate rises, the introduction of the Hips and the Northern Rock crisis have all left people looking over their shoulders. There are less people looking and also less stock of property on the market."

Barratt Developments cited the same reasons for the "tightening" in the market.

Mark Clare, the group's chief executive, said: "It is not yet clear how quickly the market will recover but we have to assume that there will be downward pressure on volumes and price inflation in the short-term."

William H Brown estate agency in Colchester High Street said the Hips and interest rate rises had dominated the market this year and house prices had continued to rise despite sales having "fallen considerably when compared to 2006".

Branch manager Rob Jenner explained: "The introduction of Hips saw an 18 per cent surge in instructions at our Colchester office during June and July. However, in August and September there was an 18 per cent fall."

The firm is tackling the slowdown by reducing the prices on some properties.

David Boyden insisted the housing market was not "falling apart", but said property businesses are having to "work very hard to get sales together."

"It's tough out there and the second hand properties on the big developments are having to be very competitively priced," he said.