The housing market is beginning to show signs of slowing despite prices increasing to their highest rate for two-and-a-half years.

A survey of residential property published by the Royal Institute of Chartered Surveyors showed the rate of growth had not increased in the three months to May, the first time in five months.

Surveyors claim the current problem of sharp price increases is still due to a shortage of suitable homes on the market.

The average number of properties per surveyor fell for the third consecutive month.

The ratio of completed sales to unsold stock rose to 64 per cent, the highest since August 1988.Despite the easing of price inflation, many chartered surveyors forecast that prices will continue to rise in the coming months.

The difference between those expecting prices to rise against those expecting prices to fall was 56 per cent, down from 75 per cent last month.

Sales are expected to hold steady in the coming months as the summer holiday period slows the market.

The society has warned that unless Britain builds more cheaper homes and the construction industry recruits more people, the underlying problems will not be solved.

RICS national housing spokesman, Ian Perry, warned a slowdown was vital to help first time buyers who are finding it increasingly difficult to get on the property ladder.

"The summer months are traditionally a quieter period as people focus on holidays, and the first signs are appearing that the housing market may be losing some of its heat and heading, if not for a slowdown, then at least for a period of stability," he said.

"The market does need this as it will greatly help the first time buyer who has been finding it difficult to keep up with rapidly rising prices and competition from the buy-to-let sector."