Sellers are regaining the upper hand in the housing market because so few properties are being put up for sale, a study showed today.

The number of homes in England and Wales coming on to the market has stagnated as fears of a collapse in house prices recede, the Royal Institution of Chartered Surveyors (RICS) said.

And with the number of buyer inquiries at its strongest level since September, RICS said competition for properties had risen along with market confidence.

RICS housing spokesman Ian Perry said: "The balance of power remains with the purchasers but the gap is narrowing.

"Earlier in the year, many people were accepting up to ten per cent below the asking price for their properties.

"Our research seems to indicate that this situation is showing signs of change as buyers begin to come back into the market."

RICS said two per cent more surveyors reported a rise in new instructions than a fall during July, down from five per cent in June. Stocks are also four per cent lower than three months earlier.

However, RICS added that 11 per cent more surveyors reported a rise in buyer inquiries than a fall, with interest higher in most regions except the Midlands.

Better demand conditions meant prices were little changed in July following steady declines since February, the survey said.

All of the northern regions of England as well as Wales showed price increases with the pace of increase accelerating in Yorkshire & Humberside for the first time since last October.

Prices fell in all the southern regions, RICS added, although the pace of decline has slowed, particularly in London.

And for the next three months, 32 per cent more surveyors expect sales to rise than fall, ensuring a rise in confidence of six per cent on the previous month, RICS added.

Tuesday August 19, 2003