House price momentum in August slowed to the same level it was a year ago and new buyer enquiries fell for the second consecutive month, according to RICS’ latest Residential Market Survey.

The number of agreed house sales also dipped for the first time since September 2012, but the overall picture shows a return to a less volatile market, with more stable price expectations over the next three months (a net balance of 9% of surveyors now expecting prices to rise, rather than fall – down from 51% at the start of the year).

RICS said that significantly, the concern over a potential rise in interest rates could be a contributing factor to the fall in buyer interest and the number of agreed house sales. Members also indicated that Mortgage Market Review (MMR) – and an increasingly acute shortage of conveyancers – is adding between two and four weeks onto the time it takes to complete a transaction.

At a national level, the sales and demand picture was mixed. In London, the South West and the West Midlands, there was a significant dip in new buyer interest, but Scotland and Northern Ireland were noticeable exceptions, where buyer enquiries remain firm, with a net balance of 43% and 52% respectively.

While a lack of supply remains a challenge for the market across the whole of the country, there are at last some signs in the capital, where this problem has been most chronic, that instructions are now picking up.

Prices over the next 12 months are still projected by surveyors to rise over the next year by 2.3% across the whole country, which is down from 3.7% at the start of 2014. Surveyors in Northern Ireland now appear most optimistic, anticipating a price gain of 3.9%.

Simon Rubinsohn, RICS chief economist, said: “Buyer activity in the London market has been particularly pronounced but that is in a sense consistent with the move to a more sustainable market in the capital.

“Elsewhere around the country, the market in general is showing a greater degree of resilience, but that largely reflects the fact that in some areas the recovery has only recently taken hold and affordability is rather less stretched. Significantly, members now expect price gains over the next year to be faster outside of the capital, than in it.

“Some of the momentum has come out of the housing market of late reflecting in part concerns over a likely rise in the cost of borrowing at some point in the not too distant future. However, we are also being told that the implementation of the recommendations of the MMR is taking its toll on activity; slowing the transaction process by on average up to a month.

“Meanwhile, there are increasing signs that the London market is gradually moving onto a more sustainable footing with a modest increase in the number of instructions coming through slowly helping to create a better balance with demand and, in the process, taking the edge off price gains.”