Hot spot house prices 'soaring'

House prices in Wales have risen by 5% in three months, according to the Royal Institute of Chartered Surveyors.

Three quarters of surveyors in Wales reported the sharp increase in prices up to April, taking average house prices up by £3,590.

First-time buyers are now struggling more than ever to secure their first home, the RICS report concludes.

There are also concerns over the volume of houses available for sale, with the number of new instructions falling for the fifth month in a row.

House prices across Wales are rising at their fastest rate in 10 years, with the average property costing £71,804 in January, before this latest reported increase.

Average house prices by region, January 2002

North Wales £68,165

Mid Wales £74,386

West Wales £62,663

South East Wales £78,628

RICS Wales director Cathy McLean said the supply of properties was now "very tight".

First time buyers are faced with soaring prices and a battle with buy-to-let purchasers chasing the same properties.

"Despite this enquiries continue to rise at a healthy pace," said Ms McLean.

"Although demand is buoyant, the lack of supply could hold back sales in the coming months.

"There would appear to be no end in sight to the rise in prices, although in some areas chartered surveyors have reported that overpricing is meeting resistance from buyers.

Some parts of Wales are seeing prices soar

"Many first time buyers are also finding it hard to get a first footing on the property ladder, not only being put off by high prices, but also by the number of buy-to-let investors who are looking for property in the same sector of the market," she said.

In January, new property hot spots emerged at Caerleon near Newport, Brynhyfryd in Swansea and the Canton and Grangetown areas of Cardiff proving especially popular.

But there is evidence to suggest that prices have fallen in some parts of the country, notably those hit by industrial job losses.

In 2001, house prices rose by 9.8% in Wales according to statistics released by the Principality building society.

The society said a shortage of affordable homes in Cardiff has apparently pushed many first-time buyers out to satellite towns like Caerphilly and Talbot Green.