House prices and tempers have been rising over the last few months as more buyers have been chasing fewer properties, says the Royal Institution of Chartered Surveyors. However, the tide seems to have turned, the surveyors report in their latest survey of the housing market, as more people are starting to put their properties on the market.

In January 41 percent more surveyors reported a rise in instructions than a fall, compared to 9 percent more reporting a fall in December. RICS believes this is due to the fact that many sellers started the year fearing that the house price bubble might burst and have put their property on the market as soon as possible.

Rising interest rates and the threat of an ongoing upward trend may also be putting financial pressure on some households to sell. But a rebound in buyer enquiries in January suggests that buyers are shrugging off speculation over increasing interest rates.

House prices are continuing to rise steadily across the UK particularly in Northern regions and Wales. For the three months to January, 38 percent more surveyors reported a rise in house prices than a fall, compared to 39 percent in December, and a long-run average of 23 percent. The North West recorded the highest prices ever recorded by the RICS Survey, but the weakest pace of increase in prices continues to be the South East.

Surveyor confidence levels in future house price changes are highest in London, which may in part be due to the recovery in the city’s financial markets over the last 6-9 months. Confidence levels are lowest in the East Midlands.

The number of people looking for property to buy remains high. New buyer enquiries rose firmly in January, at the quickest pace since last September. In January, 28 percent more surveyors reported a rise in new buyer enquiries that a reported a fall following a lull in the market at the end of last year.

RICS housing spokesman and chartered surveyor, Ian Perry, says:

"The tension in the housing market is lifting. By the end of last year it was a case of not enough property for the number of buyers. The hint of rising interest rates in 2004 has brought more houses onto the market early in the year, but buyers seem undeterred and as enthusiastic as ever to enter the market."

"We expect the tight market conditions to relax, as rising interest rates put a dampener on the market, though a positive economic environment will prevent a marked slowdown from happening."