Sales in the housing market fell in Wales last month but the shortage of available housing is continuing to raise prices, according to a new report.

The latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey for July reported that there were fewer homebuyers active in the housing market in Wales last month.

Yet, limited available stock is continuing to drive house prices up.

Read more: Housing market in Wales continues to grow as three Welsh towns see prices jump by more than 25%

The RICS Residential Market Survey is a monthly sentiment survey of chartered surveyors who operate in the residential sales and lettings markets.

It compiles net balance data, calculated by taking the number of those surveyed reporting a rise in prices minus those reporting a fall.

The survey found that new buyer enquiries have reduced in number for the fourth consecutive month, with a net balance of -47% among those surveyed, the lowest figure since May 2020.

Higher interest rates and the cost of living crisis were cited among those surveyed as reasons for the drop in market activity.

The RICS also reported that newly agreed sales had reduced, with a net balance of -11% of respondents recorded.

The institute said this was the fifth successive month that the balance of those surveyed in Wales had pointed to lower levels of newly agreed sales.

A net balance of +13% of those surveyed reported an increase in new instructions to sell.

But the survey found that said this comes after a long period of supply coming onto the market reducing.

It also added that stocks on agents' books are still low in Wales by historic standards.

On pricing, a net balance of 54% of those surveyed in Wales said there was an increase in prices over the past three months, down from 64% in June.

A net balance of 9% of respondents expect prices to rise over the next quarter.

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Those surveyed in Wales also expect sales activity to reduce in the next three months, with three month sales expectations to be at its lowest since April 2020.

Anthony Filice, a fellow of the RICS from Kelvin Francis estate agents, said: "There are more properties being listed, but they are taking longer to sell. Buyers are taking more time, and some are making offers on more than one property, before making a final decision. The situation coincides with the onset of the summer holidays."

RICS senior economist Tarrant Parsons said: "Amid a backdrop of sharply rising living costs, slowing economic growth and higher interest rates, it is little surprise that housing market activity is now losing some momentum. With monetary policy set to be tightened further over the coming months, sales expectations point to a further softening in transaction volumes going forward."

Mr Parsons added: "Nevertheless, with respect to house prices, limited supply available is still seen as a crucial factor underpinning the market. Although house price growth is likely to continue to ease, respondents still anticipate prices will be modestly higher than current levels in a year’s time."