There was a further sign today that the UKs housing market is stabilising following mounting concerns that higher borrowing costs would help engineer a crash.

Demand for rental property has risen amidst more stable conditions in the housing sector, although at a slower pace than in recent times, according to a quarterly survey of the rental market produced by the Royal Institution of Chartered Surveyors.

"It looks like any signs of panic in the housing market are largely over, bringing stability to the lettings market," said Jeremy Leaf, RICSs spokesman.

Last week, RICS revealed that house prices fell in January at the slowest pace in four months, raising expectations that the worst may be over, while Hometracks monthly survey, released yesterday, reveals that buying interest picked up markedly in February. Hometrack found that new buyers registering with estate agents in February rose by a staggering 28.5% compared with a 12.8% decline in January, while the number of agreed sales rose by an 36% compared with a 13% decline in January.