THE Royal Institution of Chartered Surveyors (RICS) has praised the decision to raise interest rates by 0.25 per cent to five per cent.

RICS South East regional director Trevor Hines said: "The modest rise will help cool the South East housing market which has once again shown significant growth.

"The market has shrugged-off the August interest rate hike with property price inflation at close to a double digit pace.

"This interest rate rise, together with possibly one more in early 2007, should help to produce a soft-landing for the housing market, giving rise to a more stable market environment for buyers."