LONDON (Reuters) – House price inflation in Britain picked up last month, propelled by a shortage of sellers that suggested further price rises lie ahead, a closely watched survey showed on Thursday.

The Royal Institution of Chartered Surveyors said a net balance of 70% of its members reported an increase in house prices last month, up from a revised 69% in September.

A Reuters poll of economists had pointed to a reading of 65%.

The October survey showed the first increase in the house price balance since May.

Other surveys have also pointed to continued house price growth since July when a year-long exemption from the stamp duty tax on house purchases was halved in scale in England and Northern Ireland and expired altogether in Wales.

Scotland ended the incentive in April and it expired in its entirety in England and Northern Ireland at the end of September.

RICS Chief Economist Simon Rubinsohn said expectations of higher Bank of England interest rates were a sideshow to the lack of supply of homes coming to the market.

Last week the BoE refrained from raising rates at its November policy decision, against the expectations of many investors, but top officials at the central bank have said borrowing costs are likely to go up soon.

“The inventory on agents’ books appears to have slipped back towards historic lows and this seems to be underpinning both the current price trend and expectations for the next year,” Rubinsohn said.

“Meanwhile although there is likely to be some drop in activity in the immediate aftermath of the expiry of the stamp duty break, most activity indicators currently remain solid. Indeed, the main challenge for buyers looking forward may once again be a lack of choice of property on the market.”

More than two-thirds of surveyors said they expected house prices to continue rising over the next 12 months, the survey showed.

(Reporting by Andy Bruce; Editing by William Schomberg)