Property sales increased for the third month in a row in February as a result of increased demand and higher levels of new instructions, the latest index from the Royal Institution of Chartered Surveyors has shown.

The survey of valuers revealed a net balance of 20 per cent of respondents saw an increase in new buyer enquiries over the month.

The net balance figure is the percentage of surveyors reporting an increase in enquiries minus the percentage who reported a reduction.

Participants are forecasting an improving outlook for the rest of the year, as 61 per cent expect more homes to be sold as the year progresses.

The share of respondents reporting an increase in new homes coming onto the market inched upwards for the third consecutive month to a net balance of 15 per cent.

Surveyors in branches across the West Midlands and the South East reported the biggest jump in new listings.

There was an increase in the number of respondents reporting an increase in prices from a net balance of 18 per cent in January to 29 per cent last month.

Surveyors reported house price increases across all regions of the UK, but growth was strongest in London, Yorkshire and the Humber and East Anglia all saw the strongest increase in house prices. 

A net balance of 22 per cent are expecting house prices to continue to rise further through the spring.

But experts have raised concerns that fears over coronavirus may deter house hunters from attending viewings and the economic impact of the outbreak could weigh on confidence.

There was an increase in demand from tenants in February, but the number of rental properties listed with agents fell again. 

Rics predicts that rising demand and falling supply will see rents increase by between 2 and 3 per cent per annum by 2025 if this trend is maintained.

RICS chief economist Simon Rubinsohn says: “It is encouraging that the results of the latest survey continue to show a positive trend both in terms of potential buyer interest and new instructions to agents. 

“Indeed, this is the first time since 2014 that new supply to the market on the RICS indicator has increased for three consecutive months.”

He adds: “Inventory levels are still at historically low levels despite this but the firmer trend in appraisals suggests that the picture could improve over the coming months providing the coronavirus doesn’t become more of an inhibitor of activity in the sector.

“For now at least, feedback around expectations are consistent with activity levels continuing to strengthen albeit relatively modestly.”

North London estate agent and former RICS residential chairman Jeremy Leaf says: “The usually reliable RICS survey suggests that house-price inflation, demand and new listings have been increasing for the past few months, which is good news, even though it is based largely on pre-virus responses. 

“It confirms what many of our buyers and sellers are telling us – that the impact will be serious but short term. 

“Our viewings are about 25 per cent lower than we might have expected at this time of year but sales are not being cancelled so far and we have even seen exchanges of contract immediately post-Budget.”