House prices in Wales rose in June due to increased demand and decreased supply.

According to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, data shows an eight percent net balance of Welsh surveyors reporting rising house prices, compared to a negative four percent in May and a negative eight percent in April.

The trend is anticipated to continue into the third quarter.

This appears to be because of a 31 percent net balance of surveyors that new buyer enquiries rose, coupled with a drop in supply.

June saw a negative 30 percent net balance of respondents noting a fall in properties for sale, marking the lowest balance since August last year.

While house sales remained flat, future predictions are more optimistic, with a 32 percent balance of surveyors expecting sales to increase in the next three months.

The rental market shows a similar pattern with a 40 percent net balance reporting a rise in demand and a 17 percent fall in supply.

As a result, half of Welsh surveyors predict rent prices will rise in the third quarter.

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, said: “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, said: "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.”

Tarrant Parsons, senior economist at RICS, 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”.