By Daniel Hunter

The UK’s housing market continued to show signs of recovery during June, with rising house prices and increased demand, says the latest RICS Residential Market Survey.

21% more chartered surveyors reported prices rose rather than fell in June, making this the strongest month for house prices since January 2010. The outlook for future prices is also strong with 23% more respondents reporting that prices will rise rather than fall over the coming three months.

This rise in prices has mainly been fuelled by increasing numbers of prospective buyers returning to the market. Last month, a net balance of 38% more chartered surveyors reported a rise in new buyer enquiries. In a clear sign that market confidence is gradually being restored, and that funding schemes are making a difference, demand from prospective buyers has now risen month on month since January and is currently showing its fastest rate of growth since August 2009.

Reflecting this slightly more positive mood, surveyors also expect home sales to rise over the coming three months, with a net balance of 45% more respondents (from 36% in May) predicting sales will increase. This is the most positive reading in this series’ history, which began in April 1999.

Despite the increasing appetite to purchase property and the added support to do so, the rental market continues to be important in providing housing. Overall demand for rented property actually rose slightly during June, to a net balance of 27% (from 21%).

"After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market. It is important to remember that activity levels still remain depressed by historic standards but the various initiatives designed to encourage the provision of finance into the market do appear to be paying dividends," Peter Bolton King, RICS Global Residential Director, said.

Despite the increased interest in buying a property, our numbers continue to show that demand from would-be tenants remains firm and that rents are likely to continue to edge upwards over the next twelve months. As the cost of shelter moves higher, it is absolutely critical that the government continues to focus on its role in supporting the delivery of more new homes into the market.