Fears of a collapse in house prices prompted more people to put their homes up for sale last month, a survey shows.

The hint of rising interest rates in 2004 brought more houses on to the market, according to a survey by the Royal Institution of Chartered Surveyors (RICS).

During January more surveyors - about 41 per cent - reported a rise in sale instructions rather than a fall, the study showed.

That compared to more surveyors - nine per cent - reporting a fall rather than a rise in December.

The number of people interested in buying a property also remains high, despite predictions that interest rates will rise above the current 4 per cent base rate during the year.

New buyer inquiries rose in January at their quickest pace since last September.

In January, 28 per cent more surveyors reported a rise in new inquiries than those reporting a lull at the end of last year.

The study also showed house prices continue to rise steadily across the UK, particularly in northern England and Wales.

During the period, 38 per cent more surveyors reported a rise in house prices rather than a fall - slightly down on the 39 per cent in December, and a long-run average of 23 per cent.

The North-West had the highest prices yet recorded by the RICS survey but the weakest pace of increase in prices continues to be the South-East, the survey showed.

RICS chartered surveyor Ian Perry said buyers seem undeterred and remain enthusiastic to enter the market.

He said: "We expect the tight market conditions to relax, as rising interest rates put a dampener on the market, though a positive economic environment will prevent a marked slowdown from happening."

Wednesday February 18, 2004