Reports of more cautious consumer spending during May do not extend to the housing market, according to the latest monthly housing market survey conducted by the National Association of Estate Agents (NAEA).

And, according to NAEA chief executive Hugh Dunsmore-Hardy, this month's survey offers positive news for the economy as confidence in the housing market shows little sign of abatement.

He said: "Consumer confidence has played a crucial part in keeping the British economy out of recession over the past months. As the housing market continues to boom there have been suggestions that action should be taken to slow it down. The Bank of England warned last week that it was considering doing so.

"We still believe that the market will run its course and that any action by the Bank of England can only be justified if house price rises threaten to take inflation rates higher than Treasury guidelines. Any resulting action should be modest so that it slows the market rather than causing it to falter.

"The NAEA anticipates that prices will slow and adjust in the second half of this year, and the market will moderate itself."

The NAEA survey shows that, during May, sales to first time buyers increased by five per cent to 25 per cent of the total, despite price rises of 19 per cent, and the increasingly acute shortage of homes available.

Mr Dunsmore-Hardy believes that the level of sales to first time buyers shows that there are still opportunities and areas where it is possible to get onto the housing ladder.

He commented: "As house prices rise there is continuing talk of the development of hotspots, where first time buyers will not be able to enter the market. Continuing activity at the lower end of the market is an indicator that first time buyers are still able to find affordable new homes at present."

The survey shows that the shortage of supply continues to bite, with sales overall falling by 20 per cent since April, and 53 per cent of estate agents reporting that the overall number of viewings is down compared with last month. At the same time, the average number of viewings per sale has rocketed from eleven to 35, indicating that more people are chasing a dwindling number of homes.

NAEA president, Julie Westby, said: "After several months in which the number of new buyers coming into the market declined, applicant enquiries have again risen sharply. This is contrary to the usual trend in early summer, when the market slows a little as the summer holiday period approaches, and it again suggests that the shortage of supply will be evident for some time."