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LONDON-The growth in the buy-to-let market over the last three years, as private investors look to property for positive returns while the stock market flounders, has helped underpin the UK residential market, according to the RICS.

In October 2000, just 8% of properties were sold to investors. But by August 2003 the figure had risen to 13%. But according to the RICS this suggests that first time buyers are being squeezed out by buy-to-let investors.

The steady rise in new buyers looking for houses continues, with 16 per cent more surveyors reporting a rise in buyer enquiries than a fall during August. The RICS says this trend is a reflection of stability in the employment market and low interest rates.

But while demand is rising, supply is falling: the number of properties on the market in August fell for the third consecutive month. As a result house prices are rising again: RICS members detected a slight rise in in August, the first increase since January this year.

RICS housing spokesman Jeremy Leaf said: “The summer months are traditionally quiet, so we expect to see an increase in activity as we come into the autumn following the start of the new school year. The national picture is one of quite modest house price rises for the first time this year, although the south is still trailing behind the north.”

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