HOUSE prices have fallen in the South East for the first time in over a year, according to the Royal Institution of Chartered Surveyors (RICS).

The decline follows a run of three interest rate rises in just four months over the spring and summer. Prospective buyers have taken notice of rising borrowing costs and warnings from the Bank of England, though there are few signs a significant market downturn is around the corner.

Trevor Hines, director of RICS South East, said: “The summer is always a quieter period as people are away and tend to take a break from house hunting. Warnings from the Bank of England have reduced confidence, but houses that reflect their asking price are still attracting plenty of attention.

“Some speculation in the housing market is quite gloomy at the moment. However, the RICS is confident a prolonged slide in prices will be avoided, underpinned by the strength of the economy and good employment prospects.”

A growing proportion of surveyors are reporting a decline in prices, although over half in the South East are still seeing a static market.

However, although prices are expected to drop over the next three months and sales have weakened for the fourth month running, surveyors remain fairly upbeat over future sales.

Richard Athow, from Folkestone-based firm Philip A Chapman, said: “ We have had a good quantity of valuations and take-ones. Our feelings are that the market should be active this Autumn.”

Mr Hines added: “At present, it appears that job security remains good, which is helping to maintain consumer confidence even as interest rates have risen.”