DEMAND is continuing to outstrip supply in the Scottish housing market, according to a new report.

A net balance of 32 per cent of chartered surveyors reported a growth in new buyer inquiries last month, the latest Royal Institution of Chartered Surveyors (Rics) Residential Market Survey found.

But only a net balance of one per cent reported an increase in new instructions for properties coming on to the market in June.

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Continued demand was also reflected in the net balance for newly agreed sales, regarded as a good indicator of market activity. In the month that saw the Bank of England introduce a 15 per cent cap on high (4.5 times annual income and above) mortgages, respondents also perceived banks to be lending less.

Average Loan to Value (LTV) ratios among first-time buyers dropped for the second consecutive month in Scotland to 85.4 per cent, down from 88 per cent in April.

Sarah Speirs, director Rics Scotland, said: "In Scotland we continue to see demand exceeding supply and this has had a direct impact on prices."