HOUSE prices rises have reached a two-year high in the South East, according to the latest market survey from the Royal Institution of Chartered Surveyors (RICS).

Price rises, which were above the historical average for the survey, accelerated last month with more than 38 per cent of chartered surveyors in the region reporting an increase during February, compared to only four per cent who reported a fall and 58 per cent of surveyors seeing no change.

The increase in prices can be attributed to the current London market, which has seen 68 per cent of city chartered surveyor estate agents report a rise rather than a fall in house prices in February.

This is the largest rise for London in three and a half years, with family homes the highest in demand.

Trevor Hines, RICS’ South East regional director, said: "Traditionally, where London goes the rest of the market follows and agents will be hoping this marks the start of wider, firmer housing market growth, which is already being seen in the South East, as buyers begin to compete more aggressively for the homes they want.

"Overall, the national picture shows a pick up in two and three bedroom family houses. Unfortunately this is precisely the kind of house that is being built less and less in the South East as the Government’s planning policy favours higher density building, which often means two bedroom flats."

The region’s sales and buyer enquiries showed no significant change in February, but the stable level of activity has not dented confidence with surveyors, who now expect a stronger climate for prices and sales activity over the next three months.

The stock of available properties on surveyors’ books fell four per cent from the same time last year. This tightening of supply has brought a new sense of urgency to the demand side of the market with buyers keen to progress deals to avoid disappointment.

With available property in short supply, sellers are retaining a strong position if their pricing is realistic.