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LONDON-The first signs of a slowdown in the housing market have appeared, says the Royal Institution of Chartered Surveyors in its latest residential property survey. House prices continue their upward trend, but the pace of increase has stabilised for the first time for five months, with the rate of increaseremaining the same as in the previous month.

A shortage of suitable homes on the market still remains the biggest problem. The average number of properties per surveyor fell for the third consecutive month. The ratio of completed sales to unsold stock rose to 64%, the highest since August 1988.

The number of completed sales fell back. The average number of sales per surveyor dropped to 36, down one from last month. Sales are little changed since February, but have stayed close to the highest levels recorded since December 1989.

Despite the easing of price inflation, many chartered surveyors expect prices to continue to rise in the coming months. The difference between those expecting prices to rise against those expecting prices to fall was 56%, down from 75% last month.

Sales are expected to hold steady in the coming months as the effects of the Jubilee celebrations, the World Cup and the start of the summer holiday period slow the market. Buyer enquiries have seen a modest pace of growth in the run up to these events. The difference between surveyors noting a risein enquiries against those seeing a fall is 16%, down on the 50% reported last month.

RICS national housing spokesman, Ian Perry, said: “The summer months are traditionally a quieter period as people focus on holidays, and the first signs are appearing that the housing market may belosing some of its heat and heading, if not for a slowdown, then at least for a period of stability. The market does need this as it will greatly help the first time buyer who has been finding it difficult to keep up with rapidly rising prices and competition from the buy-to-let sector.”

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