PROPERTY prices in York and North Yorkshire are still rising, but the pace has slowed slightly for the first time this year, a new survey reveals today.

The slowdown comes as buyers assess the market after recent rises in interest rates, according to a Royal Institution of Chartered Surveyors (RICS) housing survey.

Yorkshire is one region witnessing a decline in buyer inquiries, the report reveals, although the market remains "robust".

Speculation over interest rate rises has dampened buyers' moods, the RICS reports. But the number of houses for sale remains relatively low, putting upward pressure on prices.

Estate agents also reported a decline in the number of people looking for properties to buy - the first fall since December 2003.

In Yorkshire and Humberside, newly-agreed sales rose moderately in May, but surveyors expect to see a small fallback in sales activity over the next three months.

Surveyors today reported a similar picture across York and North Yorkshire.

Kevin Hollinrake, of Hunters Estate Agents, York, said rising interest rates and publicity about the market slowing would produce more "realistic" prices.

Mr Hollinrake said: "There are early signs of slowdown in the housing market.

"It's in nobody's interests to see prices falling, but in everyone's interests to see a more moderate rate of growth.

"In York the number of sales has dropped back by about ten to 15 per cent in the last two to three months.

"Now there are more sustainable levels. Instead of seeing 20 per cent annual growth we could now see ten per cent over the next couple of years. That's far more realistic."

He said any dip in prices could only help first-time buyers.

Chris Wilson, managing partner of Boulton and Cooper Stephensons, Malton, said demand had fallen in the last 18 months. He told the Evening Press: "The market is still active, but interest rates are having an impact.

"Twenty per cent property inflation when wages are moving at about three per cent is just not realistic."

He predicted that good quality housing will continue to sell, but "run of the mill" homes would become more realistically priced.

Edward Waterson, of Carter Jonas, York, said the expected summer strength in the market had arrived, but added: "There is an element of greed creeping in among vendors."

Updated: 10:54 Tuesday, June 15, 2004