RICS: House price balance at lowest outside of lockdowns in over 10 years

RICS: House price balance at lowest outside of lockdowns in over 10 years

House prices in Scotland have continued to fall with the price balance now at its lowest outside of lockdowns in over 10 years, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.

House prices remained in negative territory for the second consecutive month. In the most recent survey, a net balance of -17% of Scottish respondents stated that house prices fell over the past three months. This is a sharp decline from the -8% reported in July. The last time it was lower was in the April to June period of 2020 when coronavirus restrictions were in place. Outside of that, the price balance is at its lowest since January 2013.

However, Scotland continues to be in a stronger position than most other UK regions. The overall UK price balance sits at -68%, and all regions of the UK had more negative balances than Scotland, except for Northern Ireland.

While Scotland’s market remains resilient compared to other UK regions, the outlook appears gloomy. A net balance of -39% of Scottish respondents expect house prices to decline further in the next three months – the most negative outlook since May 2020, when the market was impacted by pandemic restrictions.

Looking at demand, a net balance of -30% of Scottish respondents in the August survey reported that new buyer enquiries fell. This is compared to -57% the month previous.

Regarding supply, a net balance of -31% of Scottish respondents reported a fall in new properties coming onto the market throughout August,

The limited supply and demand are unsurprisingly impacting on sales with a net balance of -56% of surveyors in Scotland reporting a decline in sales in the most recent survey.

Marion Currie AssocRICS, RICS registered valuer for Galbraith in Dumfries & Galloway, said: “Buyer caution continues, with deals taking longer to achieve.

“That said, there are still a good many cash buyers active in the market, and sensibly priced properties will attract their interest.”

Craig Henderson MRICS, of Graham & Sibbald Llp in Ayrshire, commented: “The market continues pretty much as it has all this year, with demand still outstripping supply, but buyers are more cautious about paying any more than a price at or around the home report value.

“Overall still positive despite the ongoing inflation and interest rate pressures.”

Thomas Baird MRICS of Select Surveyors in Glasgow said: “Despite a relatively slow summer market we are starting to see home report instructions increase as we enter the autumn season.”

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