Shortage of homes ‘pushing up Scottish house prices’

Sarah Speirs
Sarah Speirs

House prices continued to rise across Scotland last month as supply fell short of demand, according to a report.

The UK Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) found that housing supply continued to decline, with 21 per cent more respondents reporting a fall in properties coming onto the market in Scotland.

Sales are likely to rise even more in the short term, with 16 per cent more chartered surveyors expecting an increase over the next three months.

RICS said this was due in part to buy-to-let investors moving to purchase property ahead of proposed changes to the Land and Buildings Transaction Tax which will see people buying second homes and buy-to-let landlords facing an additional supplement of 3 per cent of the purchase price from April.

Sarah Speirs, director RICS in Scotland, said: “Again we are seeing a failure of pick up in new properties coming onto the Scottish market and, although demand was not as strong this month, housing supply is still lagging behind. However, with buy to let investors rushing to get into the market ahead of the Land and Buildings Transaction Tax hike, the near term pressure on prices is intensifying.

“How the tax changes planned for the buy to let sector over the next few years play out remains to be seen but there are concerns raised in the survey that some existing landlords will look to either gradually scale back on their portfolios or exit the market altogether as the more penal regime begins to bite. Against this backdrop, it is perhaps not surprising that the key RICS indicators points to further rent (as well as house price) increases.”

Tags: RICS

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