As debate heats up about prospects for the housing market, the latest market survey from RICS (Royal Institution of Chartered Surveyors) reports that house prices have frozen for the first time in a year.

Following a period of strong house price inflation over the past nine months, the figures from chartered surveyor estate agents for the three months to July indicate price rises have slowed across most of the country. For the three months to July, three percent more surveyors reported a rise in prices than a fall, compared to 17 percent in June and a recent high of 45 percent in March.

Prices are static in the Midlands and East Anglia, falling in some areas of southern England, while showing moderate increases in the North West, Yorkshire and Humberside and Wales. The only locations to show robust price rises were the North East and Scotland.

Chartered surveyor estate agents believe back-to-back interest rate rises are responsible for a significant drop in the number of people looking to buy. New buyer enquiries have fallen over the last three months even when taking into account the summer quiet time.

The number of people putting their house on the market rose over the last six months, says RICS, causing a modest upturn in the supply of property on the market, but seller activity was at a standstill in July. The number of houses for sale on surveyors’ books rose to 60 in July up from 58 in June but remain at historically low levels.

In July chartered surveyor estate agents’ confidence in future sales showed a slight improvement on June when many were feeling particularly negative. Likewise the outlook for house prices has also improved.

RICS housing spokesman, Ian Perry, says: "This is a traditionally quiet time of year but still buyers and sellers are showing a noticeable air of caution. The latest indication from the Bank of England is that interest rates are unlikely to increase substantially from now until the end of the year"

"Unlike last year, the supply of new property coming to the market has remained low and kept market conditions fairly tight, which is a major factor underpinning prices."

"The drop in the number of buyers looking around has been less pronounced than during the Iraq war, which we believe is a reflection of today’s stronger economy and firmer labour market."

"When the market cools it provides a great opportunity for first time buyers. We expect a steady demand for property as we go into the autumn but only on those that are correctly priced."