UK house prices 'continuing to rise' - RICS

House prices continued to rise during October despite an increase in the number of homes being put up for sale, research showed today.

The Royal Institution of Chartered Surveyors said 34% more surveyors reported seeing price rises rather than price falls during the month, the highest level since December 2006.

The increase came despite evidence that sellers are beginning to return to the market, with a balance of 15% of surveyors reporting a rise in instructions, up from just 5% in September.

The group said the number of people looking to sell their home rose in all regions of the UK for the first time since the credit crunch struck.

But despite this, the average number of unsold properties chartered surveyor estate agents had on their books remained broadly unchanged for the third consecutive month at 64.

Economists have attributed the recent strength of the housing market to a shortage of homes for sale and they have warned that as more properties are put on to the market, prices could start to fall again.

But surveyors expect house prices to continue rising over the coming three months, with 31% more expecting a rise rather than a fall in the value of property, up from a balance of 25% in September.

Transaction levels have also continued to rise, with the average chartered surveyor estate agent selling 19 properties during the three months to the end of October, up from 18.5 during the three months to the end of September.

But the rate at which potential buyers are registering with estate agents slowed down for the fourth month in a row.

RICS spokesman Jeremy Leaf said: "Although the supply of property is beginning to pick-up, it is still insufficient to keep pace with the increase in demand which points to further prices gains in the near term.

"Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders."

The housing market revival continued to be led by London, where 95% more surveyors said prices were rising during October than those who thought they were falling, with the balance of surveyors seeing price rises also strong in the South East and South West.

The level of sales agreed is rising fastest in Yorkshire and Humberside, London and the North, while it is lowest in the East Midlands, where 21% of surveyors reported seeing a fall rather than a rise in new transactions.