Undeterred by the chill of winter and last month’s wave of Covid-19 cases—a result of the fast-spreading Omicron variant—the appetite for homes in the U.K. grew in January, according to a survey of almost 300 real estate professionals.

The number of British real estate agents who reported seeing an increase in buyer demand rose from December to the strongest level recorded since May, according to the latest residential market survey released Thursday from the Royal Institute of Chartered Surveyors (RICS).

However, the survey was conducted prior to the Bank of England’s decision in early February to increase interest rates, which could be a deterrent from some buyers, the report said. 

“There is an inevitable question mark over the impact of rising interest rates allied to the jump in the cost of living on home-buyer sentiment,” Simon Rubinsohn, RICS chief economist, said in the report.

While demand for homes has increased, a growing number of respondents reported that the number of properties available to purchase is falling. 

“Demand still outstrips supply,” Devon-based estate agent Roger Punch of Marchand Petit said in the report. “But a combination of increasing levels of appraisals and signs of slightly more cautious sentiment from would-be buyers could be early signs of a moderating market, which may make moving a more practical prospect for many over the next few months.” 

Indeed, more survey respondents reported an increased level of market appraisals in January than they have since June. 

“The increase in new market appraisals is an encouraging signal that more supply may be funneled onto the market over the coming months, but it remains to be seen whether any uplift in this area is sufficient to match the resilient trend in demand,” Mr. Rubinsohn added.

That strong demand for homes paired with slumping supply has pushed up prices, with a majority of estate agents reporting increases, particularly in the North West and South East of England.