ESTATE agent Countrywide last night dismissed fears of a housing market crash, but warned of the dampening effect of interest rate rises.

The group, which has 875 UK offices including the Bairstow Eves and Mann and Company chains, told investors in a trading statement that business levels since March had continued in a very encouraging manner.

Countrywide said the first six months of the year had seen an increase in the number of sales being arranged, coupled with a rise in house prices.

The company said it did not believe this would be followed by a property slump, although it was concerned about the impact of higher borrowing costs.

It said: "Recent interest rate rises will, we believe, have a dampening effect on the residential property market, but we are currently of the opinion that a sharp correction in either volumes or prices is unlikely."

Countrywide said its surveying and property law operations were using third parties because they had more work than they could handle.

Retail financial products continued to be arranged for a high proportion of home buyers.

In estate agency, Countrywide said the value of commissions on contracts in the hands of conveyancers awaiting exchange stood at a record level of £15m, or 25 per cent higher than a year earlier.