New buyer enquiries fell for the third month in a row in June, according to the latest Royal Institution of Chartered Surveyors (Rics) report.

It says that a net balance of -27% of survey participants reported a fall in interest, with the volume of sales also falling – this time for the second month in a row, with a net balance of -13% seeing a fall.

In the next three months, the report says, a net balance of -9% respondents expect a drop in transactions, as does a net balance of -21% within the next 12 months. It is perhaps worth noting that this has improved from the -24% figure posted in May.

Against this background of softer demand, however, prices continue to rise. In June, a net balance of +65% said that prices had risen (versus a net balance of +78% in April – a recent high), and a net balance of +37% expect prices to continue rising throughout the next 12 months.

And in the rental sector, a net balance of +36% of respondents saw tenant demand fall and a net balance of -11% watched new landlord instructions dip. The report details a net balance of +52% survey participants saying that rents will continue to move upwards in the next three months.

Rics chief economist Simon Rubinsohn comments: “Although buyer enquiries have predictably slipped a little of late, this needs to be placed in the context of the healthy level of demand in previous months.

“A probably even more striking aspect of the latest report is the concern being voiced about the rental market.

“A combination of a lack of social housing development allied to more onerous changes in the private lettings market is exacerbating the imbalance between demand and supply leaving the rent expectations metric pointing to further strong growth in the midst of the worsening cost of living crisis.”

Meanwhile, North London estate agent and former Rics residential chairman Jeremy Leaf says: “Clearly the property market is not immune from a 40-year-high in inflation and five successive increases in interest rates, which Rics confirms is reducing demand.

“However, we are still seeing considerable interest from buyers, particularly in smaller, correctly-priced family houses.

“Increasingly-stretched buyers are beginning to test the resolve of previously-intransigent sellers, which is resulting in some price softening but no major corrections so far.”