CHARTERED surveyors across the South East have seen a marked increase in the level of enquiries from prospective buyers, according to the latest housing market survey from the Royal Institution of Chartered Surveyors' (RICS).

New instructions from vendors in the region showed the first drop in around 18 months, suggesting some owners may be pulling in their horns before the excesses of Christmas or simply feel that with cold dark nights on the horizon, now might not be the best time to sell.

Despite this, confidence in the sales outlook for the South East showed a marked upturn, hitting the highest ever recorded for the survey.

Trevor Hines, RICS South East regional director, said: "While sellers asking for unrealistic prices are still struggling to find potential buyers, they are beginning to feel more confident as fears of a sharp fall in house prices have largely dissipated.

"The amount of new property coming onto the market fell in September for the first time in 18 years.

"The upturn in demand and improved outlook on interest rates has led surveyors to predict house price rises for the first time since early 2004, though these are expected to be small.

"RICS expects the recovery in activity to be sustained due to continued expansion in employment, which bodes well for a stable housing market."

Although the supply of property may be weakening and buyer enquiries rising, buyers continue to maintain their upper hand in the market as levels of unsold property remain high, giving sellers less room to negotiate on price.

Nationally the RICS is predicting a rise in house prices for the first time in 18 months, but the South East remains more cautious, showing house prices slipping back again in September.

Across the region there is a growing confidence that the housing market has strengthened compared to the same time a year ago.

The increase in buyer interest points to a gradual rise in demand, helped by August's interest rate cut. However, the number of newly agreed sales has remained largely unchanged, suggesting that buyers are continuing to adopt a considered approach.

Confidence in the outlook for prices rising is muted but is nevertheless marginally positive, thanks to the increasing demand and a possibility of further interest rate cuts, which has led surveyors to expect house prices to rise marginally by the end of the year.