House sales showed a modest rise in February said the Royal Institution of Chartered Surveyors who released its latest housing market survey this morning.

Surveyors reported another modest fall in house prices though the pace of decline eased to the slowest since last September. Demand conditions remain lacklustre.

Prospective buyers remain cautious over the market, influenced by talk of further interest rate rises in 2005, and contrast with speculation late last year that interest rates might have already peaked.

The number of newly agreed sales rose modestly for a second consecutive month in February but sales at the completion stage slipped again. The number of new enquiries received from would-be purchasers were static during the month, with concerns over another interest rate hike holding back demand despite a generally firm economy and labour market.

Against a background of tepid buyer activity, the number of sellers continued to show moderate but sustained increases. As a result, stocks of unsold property on surveyors’ books picked-up in February to the highest level since May 2003, and are up 32% over the past year. With choice of properties available for buyers increasing, the climate for prices is likely to remain quite subdued.

Surveyors continue to envisage modest price falls looking three months ahead.

Price declines were largest in the West Midlands, with weakness still apparent in the South East and East Anglia. Price falls eased in the South West and Wales while remaining moderate in Northern England as a whole. Scotland continued to show price rises while little change was observed for a third month in a row in London.