Scottish housing prices to continue upwards trajectory, reports suggest
The August 2018 Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) found that a net balance of 7% more chartered surveyors reported an increase in sales during August, while short-term sales expectations for Scotland also remain “positive”.
Turning to the lettings market, the latest numbers (which form a part of non-seasonally adjusted series) point to a further decline in fresh Scottish rental stock in August, a trend that has been emerging on the back of tax changes on buy-to-let properties, while tenant demand continues to rise firmly. Rents across the UK as a whole are therefore expected to rise at a faster rate than house prices in the medium term, with average rental growth projections standing at around 3% per annum over the next five years whilst prices are projected to rise by around 2% on the same basis.
Simon Rubinsohn, RICS chief economist, said: “It is clearly very difficult to talk about the housing market at the moment without being acutely aware of the marked differences in trends across the UK.
“As the latest RICS results highlights, in many parts of the country, including Scotland, the housing market remains quite firm.
“While a combination of a lack of stock and some level of uncertainty, both relating to the interest rate outlook and Brexit, has had an impact on activity, the overall picture in these areas is still encouraging.
“The story in London and the South East is, as has been widely recognised, rather more challenging but it is important that this is not seen as being indicative of the wider market.”
A separate study by Savills found that Scottish house prices have risen for 27 consecutive months, forecasting a 17% increase by 2022. This compares with just 7.1% in London and 14.2% across the UK as a whole.
The report found that Edinburgh experienced higher prime value growth than any other UK city, even taking into account the disparity compared to other university cities. Meanwhile, there was an increase in both sales activity and prices at the top end of Glasgow’s housing market.
Faisal Choudhry, head of Savills residential research in Scotland, said: “Whilst London and its surrounding commuter areas have been most effected by current political and economic uncertainty, there remains more confidence in the Scottish markets, where there is capacity for further growth in values.”