RICS: Strong demand in Scottish housing market slows towards end of year
The very strong demand witnessed in Scotland’s housing market since the summer started to ease back in November as the end of the year nears, according to the latest RICS Residential Market Survey.
More respondents in Scotland saw the number of newly agreed sales fall last month than saw them rise. This was the first month in five that newly agreed sales were seen to be lower, but it was only marginally so, with a net balance of -5% of respondents.
Meanwhile, a net balance of +5% of respondents said that they had experience an increase in new buyer enquiries during November, down from +34% in October.
However, despite the easing back in activity in the market during November, Scottish respondents expect activity to rise in the new year. A net balance of +13% of respondents expects the number of sales to be higher in three months’ time.
In terms of house prices, there continued to be significant upward pressure according to the latest survey, with a net balance of +69% of Scottish respondents citing a rise in property values. This was higher than the UK average of +66%.
With regard to the outlook for prices, +10% of Scottish respondents expect values to be higher than they are now in three months’ time.
Craig Henderson MRICS of Graham & Sibbald in Ayrshire, said: “We have started to see one of the busiest periods ever slow down towards the festive period, however, demand continues to be strong for any properties introduced to the market in recent weeks. I expect this will continue into the new year and beyond.”
Peter Drennan MRICS of Allied Surveyors Scotland, based in Edinburgh, added: “It has been a hectic Autumn. Sales of decent family houses with gardens have seen severe competition and premium prices, particularly bungalows. Not everything is rosy, however, and a few have dithered along. Generally, quietening down towards the year end.”
Commenting on the UK picture, Simon Rubinsohn, RICS chief economist, commented: “It is clear from responses to the latest survey that there is considerable concern about the prospect of a sharp slowdown in transaction activity following the end of the first quarter of the coming year.
“A scaling back in direct government support for the market is part of the reason for this but it is being compounded by expectations of material rise in unemployment as redundancy programmes begin to take effect. Meanwhile, there is little sense that the projected softer sales picture will feed through into pricing which is viewed as likely to prove rather stickier in the face of ongoing macro challenges.
“A key issue as government looks to continue to build the delivery pipeline will be the response of developers to a tougher market without the incentive of the stamp duty break and the tapering of the Help to Buy scheme.
“Critically, it is not simply a numbers game with the latest price moves highlighting ever more acute affordability issues and the importance of ensuring adequate provision across tenures.”