HOUSE prices in the South East may suffer in the wake of the terrorist attacks on New York and Washington, leading property market experts have warned. A survey of the three months to August by The Royal Institution of Chartered Surveyors (RICS) shows the housing market had remained strong, despite widespread predictions that it was set to fall because of a feared recession.

Completed houses sales reached their second highest level since 1993.

However, RICS South East Regional chairman David Tuffin said: "The attack on the United States and the subsequent international uncertainty will undoubtedly have an effect on the UK economy, and possibly the housing market."

The survey was carried out before the September 11 tragedy, but revealed this month that 20 per cent more chartered surveyor estate agents expected prices to rise than fall - up six per cent from last month. Mr Tuffin added: "The stabilisation of the market in the summer and the forecast slowdown can be considered a welcome pause after the rapid rises in the first half of the year.

"However, the situation remains uncertain. The latest cut in interest rates by the Bank of England will support the market. If people have made their minds up to move, and are in reasonably secure positions, then they will probably decide that interest rates are so cheap they will go ahead before rates go back up.

"But if the international situation remains unresolved for six to nine months then it will have a knock-on effect."