Surveyors expect Scottish house prices to continue to increase due to lack of stock

House prices in Scotland have continued to rise though affordability constraints, a lack of stock, economic uncertainty and interest rate rises appear to be holding back activity, surveyors have suggested.

The latest Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey for September found there was a net balance of 19% more surveyors in Scotland reporting an increase in prices, partly due to the lack of stock on the market, with the increase forecast to continue for the next three months.

Looking at new buyer enquiries, respondents reported little change in demand for the second successive report. Having remained positive over the four months prior, recent results appear to be pointing to a more stagnant trend in new buyer enquiries emerging.

Sales expectations in Scotland remain positive in the near term, with 14% more respondents expecting sales to increase during the next three months.

At the same time, the volume of new sales instructions remained in negative territory, with a net balance of -21% of respondents reporting a decline in new properties coming onto the Scottish market.

In the Scottish lettings market, tenant demand remained firm (on a non-seasonally adjusted basis). Set against this, instructions to let continued to decline, with the survey’s series for landlord listings in Scotland having been stuck in negative or flat territory since September 2015.

Simon Rubinsohn, RICS chief economist, said: “There are a number of themes running through the comments of respondents this month but uncertainty relating to Brexit negotiations is at the very top of the list followed by references to the confidential remarks made by the Bank of England Governor to the cabinet.

“All of this is not surprisingly taking its toll on the sales market with the key activity indicator in the survey flat or slightly negative in all parts of the country apart from Northern Ireland and Wales.”