Sterling tumbled across the board on Tuesday as more evidence emerged that higher interest rates were slowing Britain's once-booming property market. A survey from the Royal Institution of Chartered Surveyors suggested British house prices were falling at their fastest rate in 12 years. "The catalyst for sterling's slide was the RICS survey, but whether it justifies such a big reaction is questionable," said Adam Cole, senior currency strategist at RBC Capital Markets.
"The market is thin and is latching onto what little news there is."
The pound had fallen 0.8 percent to $1.9296 by 1505 GMT, staging a sharp reversal from 12-year highs above $1.95 last week.
Sterling was down by a similar margin against the euro at 69.35 pence, on track for its biggest one-day fall in over a month.
The RICS' seasonally-adjusted house price index fell to -48 in the three months to November, the lowest balance since December 1992 when the last UK house price bubble burst, trapping millions in negative equity.
The survey followed data from the British Bankers' Association on Monday showing the weakest mortgage lending in nearly three years.
A slowdown in Britain's property market is likely to dampen consumer spending and could deter the Bank of England from raising interest rates further.
Britain's central bank has raised interest rates five times since last November, bringing borrowing costs to 4.75 percent.