The housing market recovery gathered pace in February, with price rises the firmest since June 2004, according to the latest survey by the Royal Institution of Chartered Surveyors.

The surveyors’ report, out today, said buyer confidence has returned to the market with the number of new purchase enquiries rising yet again, despite diminished hopes that interest rates will fall again.

17% more of Rics’ estate agent members in England and Wales saw house prices rise last month, compared to those that reported a fall. This is the biggest positive balance surveyors have seen since June 2004.

New buyer enquires rose moderately in February, maintaining the steady gains recorded over the last few months. Purchaser interest has risen for nine consecutive months, a record for the survey.

Completed sales have stabilised over the past month or so, though are still up strongly over the past year, rising by 17%. The strengthening of the economy in recent months is helping to support growth in housing demand and prices, said the surveyors.

While demand and sales activity are generally improving, the stock of available properties for sales fell 4% from year ago levels. The decline reflects the fact that new sales activity is outstripping the amount of property being brought on to the market to sell, making for a balanced market compared to a buyers’ market in 2005.

Surveyors have commented that properties are beginning to sell more quickly than last year and that there is even the emergence of "sealed bids". The improving market trend is also reflected in surveyor confidence, with expectations for price rises hitting close to a two year high.

House prices rose in London at the sharpest pace in almost 3 ½ years, clearly outperforming the rest of the country for the first time since the late 1990s.

Other southern English regions have also noted a much firmer tone in recent months. For the northern English regions, modest price rises are evident except for Yorkshire & Humberside. In the Midlands, prices are still slipping slightly, but up a touch in Wales. Prices are up firmly in Scotland though the pace has slowed since the turn of the year.