Image: Pam Brophy Image: Pam Brophy

The housing market is bouncing back after the initial post-referendum panic, according to a new survey by the Royal Institution of Chartered Surveyors (Rics).

In August, the balance of surveyors reporting house prices have risen over the last three months, increasing to +12% from +5% in July, largely above the consensus of +2%, suggesting that sales have settled down following their recent fall.

The new buyer enquiries balance rose to -7 last month from -25 in July, whilst the new sales instructions balance rose from -30 to -5. Although the new figures are still in negative territory, the number of new buyers and sellers is still falling, but at a slower pace.

Rics said that the rise in house prices were a result of the shortage of homes.

Simon Rubinsohn, chief economist at Rics said: "There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum”.

"Buyer enquiries did dip again in August but only modestly, and more significantly, sales expectations are beginning to edge upwards once again”.

Earlier this month, the Bank of England cut interest rates from 0.5% to a new record low of 0.25%.

Mr Rubinsohn added: "It is likely the swift response from the Bank of England has played a role in helping to support confidence."

Halifax also reported a rise in house prices in the three months to the end of July, with an increase of 1.6% after a drop in July.

Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics said: “Looking ahead, a renewed squeeze on households’ real incomes, largely due to a rebound in inflation, likely will put renewed downward pressure on demand”.

However, how long will this stabilisation last?

Mr. Tombs said there was uncertainty surrounding the current situation and doubts that house prices “will return to a smooth upward trajectory”.

UK’s biggest estate agent, Countrywide, predict that the direction house prices are going in at the moment won’t last for long, as they forecast prices to fall by 1% next year as the economy weakens.

Fionnuala Earley, chief economist of Countryside said: “The weaker prospects for confidence, household incomes and the labour market mean that we do expect some modest falls in house prices before they return to positive growth towards the end of 2017 and into 2018.”