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The rate of house price increases slowed last month as a record rush of homes coming on to the market eased the recent shortage. Many would-be sellers took the plunge to avoid having to pay for Home Information Packs, research has shown. Surveyors reported that people had been listing houses early to avoid upfront HIP fees, pushing the rate of new instructions to its highest level in the survey's history.
Almost 40% more reported a rise in new instructions in May, up from 12% in April.
But with the full implementation of HIPs now being delayed, the Royal Institution of Chartered Surveyors is expecting a sharp reversal in new instructions in June.
The RICS said 23.9% more of its members reported a rise in prices than a fall during the month, down from 28.5% in April.
Property values have now risen for 19 consecutive months but the rate of growth has reverted back to the slowing trend which began towards the end of 2006.
Despite a further base rate hike in May buyer enquiries stabilised during the month, indicating that underlying homebuyer demand was still good.
RICS spokesman Jeremy Leaf said: "The stabilisation in buyer enquiries sends a clear signal that home buyers areundeterred by recent interest rate rises.
"However, the full impact of rising rates is yet to be felt and buyers tempted by the recent strength of house price rises may need to exercise caution.
"With interest rates expected to rise even higher and some owners fearing the end of fixed rate deals, affordability conditions are set to worsen across the board and will herald a cooling market."
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