House prices in Wales increased in June due to a growth in demand and lack of supply, as per the Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.

A 8 per cent net balance of Welsh surveyors witnessed the hike in prices, compared to -4 per cent in May and -8 per cent in April.

Several experts suggest that this trend will continue, with a 13 per cent net balance hoping for a price surge in the third quarter of the year.

The price hike appears to be the outcome of a 31 per cent net balance of surveyors reporting soaring enquiries from new buyers in June, with the figure remaining positive for seven consecutive months.

There has also been a significant drop in supply, with a -30 per cent net balance of Welsh respondents witnessing a decrease in new instructions to sell.

Experts say it's the lowest that balance has been since August of the previous year.

Surveyors are optimistic for the future, with 32 per cent of them expecting sales to rise over the next three months.

This figure showed an upsurge in positivity from May, where only 16 per cent expected rises in sales.

In the rental market too, the imbalance between supply and demand continues to be a concern.

About 40 per cent of Welsh surveyors reported a rise in demand, while -17 per cent said they noted supply falling.

Consequently, a 50 per cent net balance of surveyors believe that rents will increase through the third quarter.

Speaking about the market situation, William Graham, FRICS of Graham & Co in Newport said: "We are seeing increased demand with fewer properties available resulting in higher prices, with asking prices beginning to be exceeded.

"A fall in mortgage rates will accentuate present trend."

Tim Goodwin, AssocRICS of Williams & Goodwin The Property People in Gwynedd noted: "Seasonal factors and a wait to see approach with the election has seen a slight fall in activity but there is still a shortage of new instructions and realistic prices coming to the market."

Anthony Filice, FRICS of Kelvin Francis Ltd in Cardiff, discussed the rental market saying: "There is a wider choice of rental properties and some landlords are considering offers on rents.

"However, Landlords are still exiting the market, due to increasing regulation, and costs, reducing tax allowances, lower returns and general uncertainty."

Finally, when addressing the UK housing situation as a whole, Tarrant Parsons, RICS Senior Economist, said: "Although activity across the housing market remained subdued last month, forward looking aspects of the results did improve slightly.

"There are a couple of factors emerging that could support a gentle recovery in the months ahead.

"Perhaps most importantly, swap rates have eased in recent days, and this should allow banks to reduce mortgage rates, albeit modestly for now.

"If the Bank of England does decide that the current inflation backdrop is benign enough to start loosening monetary policy from next month, this may prompt a further softening in lending rates.

"Also, the recent election delivered a clear outcome, with housing seemingly pushed up the political agenda.

"As such, this could act to restore some confidence in the market moving forward".