CONFIDENCE is returning to the UK housing market following the Brexit vote.

The latest UK Residential Market Survey by the Royal Institute of Chartered Surveyors (RICS) shows a slight upturn in market confidence following a drop in activity and price expectations after the referendum result.

This has led the RICS to predict an increase in prices and sales activity over the next three months and longer term in the next 12 months.

Modest increases in prices are expected in most areas of the country outside London and sales expectations were at their highest since February.

The shortage of housing stock available for buyers is cited as a strong factor behind the rise in confidence and projected sales.

Stocks on estate agents’ books were approaching the levels reached last December when they plummeted to a new low.

Demand from new buyers did decrease slightly, however the pace of this decline had eased significantly.

A net balance of minus seven per cent more chartered surveyors reported a fall in demand from new buyers in August, compared to -25 per cent in July.

The picture is brightest in areas outside London.

In the capital the price net balance was in negative territory for the sixth consecutive month according to the RICS’s survey.

30 per cent of respondents noted a fall in prices rather than a rise over the past six months.

In contrast prices increased in most other areas of the UK.