RICS: Scottish house prices rise as gardens and green space continue to top shopping list
Enquiries, instructions, prices and sales all continued to rise in Scotland during August, according to the Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, as pent up demand and the stamp duty holiday continue to influence the market.
A net balance of +81% of respondents in Scotland saw an increase in new buyer enquiries over the month. As buyer enquiries continued to rise, new instructions were also on the up, with a net balance of +59% of survey participants in Scotland noting an increase in vendors listing property to sell.
Consequently, strong growth in agreed sales was cited for a second successive month, with a net balance of +64% of Scottish contributors seeing a pick-up.
Looking ahead, near term sales expectations remain positive (a net balance of 21%), but 12-month sales projections are still in negative territory, with the net balance coming in at -39%. Anecdotal evidence suggests concerns over the broader economic climate continue to drive this subdued assessment.
Meanwhile, the pandemic is expected to cause a lasting shift in the desirability of certain property characteristics in the UK, as 83% of respondents anticipate demand increasing for homes with gardens over the next two years. A total of 79% predict rising demand for those properties near green space, while and a net balance of +68% foresee a rise in the desirability of properties with more private/less communal outside space.
Turning to house prices, the August survey feedback points to a sharp acceleration in house price inflation in Scotland. A net balance of +47% of Scotland respondents reported an increase in prices, the highest reading since 2014. This is up from a net balance of +33% in July and marks a significant change from the reading of -27% registered in June.
Simon Rubinsohn, RICS chief economist, added: “The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months. More of a concern is the pick-up in prices which could intensify issues around affordability in some parts of the country. Disaggregated data shows demand generally to run ahead of supply.
“Meanwhile the results provide a further pointer to more substantive changes taking place in household behaviour in the wake of the pandemic. Increased demand for properties with garden and near green spaces has if anything increased since we tested the water in May.”
In the lettings market, tenant demand continued to rise firmly in Scotland, as did landlord instructions for the second month in succession (non-seasonally adjusted monthly series).
Rental growth expectations over the near term are relatively upbeat, with a net balance of +20% of contributors now anticipating an increase (+22% in July).