House prices in July rose at the fastest pace since 2004 according to the latest report from the Royal Institute of Chartered Surveyors (RICS). All regions are now reporting prices rises for the first time in over two years, RICS also found.

Demand is strengthening as new instructions move into decline, the Institute says, and it is therefore optimistic for house prices in the next quarter, even taking into account a quarter percent interest rate rise in August. Instructions to sell property have also fallen for the second consecutive month, as the Government U turn on HIPS has removed the urgency of would-be sellers to market their properties, RICS said.

An improving job market has also instilled greater confidence across most regions this year so far, as surveys of households indicated a good financial situation country-wide.

London and the South East remain the strongest housing markets, but healthy gains in prices were also recorded in the north west, Scotland and the south west, although the rest of the country is only showing muted gains, the report found.

Property economists Capital Economics commented that these results are positive, but their analysts still maintain that the market is set to cool by the end of the year, as stretched affordability remains a constraint on house price growth.