The number of new home buyer enquiries showed a fourth consecutive increase in October, and is the largest recorded in almost two years, said The Royal Institution of Chartered Surveyors today.

Demand conditions have been helped by the August interest rate cut, which removed lingering uncertainty over the direction of interest rates. Rising employment has also lent support to the demand for homes. Nevertheless, the upturn in demand is from a relatively low base, and has only partially retraced previous declines, said the surveyors.

Completed sales have risen almost 8% from their low in February but are still down 5% from year ago levels. With sales rising and new selling instructions at a standstill, the stock of available property on surveyors’ books have also fallen, down 4% in the past three months.

Surveyors continue to note the problem of over-priced property attracting little interest and remaining unsold. The market is still tilted in favour of would-be buyers, though is beginning to shift to a more balanced position.

Nationally, house prices slipped back again in October, though the decline was slight and the slowest in 15 months. For the three months to October, 9% more surveyors reported a drop in prices than a rise, compared to 21% more reporting a fall in September.

Across southern England house prices have either stabilised or shown marginal declines, though in the case of London prices showed the first increase in almost 1½ years. Prices continue fall back in northern England and the Midlands, but rose in the North West and Scotland.

Surveyors were the most optimistic regarding the price outlook since May 2004.