HOUSE prices in York and North Yorkshire have bounced back, as the market absorbed the first rounds of interest rate increases - but there may be trouble ahead.

The Royal Institution of Chartered Surveyors' (RICS) UK housing market survey today reports that prices in the region continued to increase at a moderate rate, with 30 per cent of chartered surveyors reporting a rise in prices rather than a fall, compared to 25.5 per cent nationally.

But there are also fears that the market may yet be skewed by the prospect of another interest rate increase, and that there is also likely to be a glut as people rush to sell their homes before the June 1 deadline for the compulsory "health check" Home Information Packs (HIPs) kicks in.

The survey reports that shortages in Yorkshire have pushed up some prices, particularly at the higher end of the market, counteracting the effect of two interest rate increases, both of 0.25 per cent, one before Christmas to five per cent and then to 5.25 per cent.

The pace of increase in Yorkshire remains above the long run average of 21.6 per cent, indicating that the housing market is still "in rude health", states the survey report.

Surveyors in York and North Yorkshire point to a shortage of some types of property in the market.

Edward Waterson, of Carter Jonas in York, said: "Although some areas of the market are patchy, there remains chronic shortage of anything special, especially at the very top of the market.

"As a result, prices are rising."

Martin Robinson, director of residential sales for York-based Hunters Property Group, said that where properties were reasonably priced, the market was steady.

He said: "There is a shortage across the board, but those which get snapped up quickly are priced from £700,000 with plenty of land attached.

"Some vendors are being cautious, fearing another potential increase next month, and are therefore not looking to buy either.

"And there could be a glut of properties coming onto the market over the next six weeks before the June 1 HIP deadline, which could slow prices."

Malcolm Parker, of Joplings in Thirsk, said: "The market is buoyant due to seasonal trends and the desire to sell prior to HIPs."

The survey found nationally that new buyer inquiries had declined for the fourth consecutive month, albeit at a slower pace, as recent interest rate rises continued to eat into the market, although the situation had stabilised in Yorkshire.