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.

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."