Transaction levels are expected to hold steady over the coming months, despite the end of the stamp duty holiday, according to the latest index from the Royal Institution of Chartered Surveyors.

It found that a net balance of 11% of the valuers and other property professionals that it surveyed are anticipating the number of sales will rise in the coming three months, up from 6% in the last index.

Sales expectations point to a stable trend in transactions over the year ahead. 

Lack of supply looks set to remain a problem, as a net balance of 35% of respondents reported a further fall in instructions this September. 

In another indication of constrained supply, respondents report that the number of appraisals undertaken during this September was lower than a year ago.  

For the third successive month newly-agreed sales dipped, with a balance of 13% of respondents reporting a decline.

The stock shortage is fuelling competition among buyers and creating upward pressure on prices. 

A balance of 68% of respondents reported that house prices were growing, down from 82% last month.

The three-month house price expectations remain positive with 21% of contributors anticipating prices to rise.

Looking further ahead, 70% of respondents anticipate price growth will continue over the coming twelve months.

In the lettings market, the trends of recent months are ongoing as tenant demand outstrips supply. 

Rics found that 62% of respondents reported a rise in the number of people looking for a rental property in September and 21% reported a decline in new landlord instructions.

The lettings professionals surveyed predict the shortage of homes to meet tenant demand is likely to drive rents higher. 

Rics chief economist Simon Rubinsohn says: “The imbalance between demand and supply remains the most striking theme in the latest survey. “And feedback from members provides little reason to believe this issue will be resolved anytime soon. 

“This is very clearly reflected in the forward-looking metrics, with both price and rent expectations close to series highs pointing to put greater pressure on affordability at a time when money markets are sensing interest rate increases coming sooner rather than later.

“Delivering higher numbers of new homes is part of the answer but it is critical they are built in the areas where the shortfall is most visible.

“It is also vital that the tenure mix of the supply pipeline is broadly based, helping to address the challenges both in the private rental market and in social housing.”

North London estate agent and former Rics residential chairman Jeremy Leaf says: “This report reflects what we are seeing at the coalface – less activity and slower price growth since taking advantage of the stamp duty holiday proved impossible.

“But we’re seeing few signs of a market correction. 

“Many buyers prefer being able to operate in the less frenzied environment prevailing today while continuing to take advantage of stock shortages and low mortgage rates in particular.”