RICS: Strong demand continues to drive Scottish housing market

Demand remained strong in Scotland’s housing market last month, according to the October 2020 RICS Residential Market Survey.

RICS: Strong demand continues to drive Scottish housing market

However, key indicators began to ease back from their high levels in September, and sales expectations are muted.

A net balance of +48% of Scotland respondents saw prices rising according to the October survey, compared to +52% in September.

When it comes to new buyer enquiries, a net balance of +29% was recorded in October, a solid increase but a softening from +55% in the September survey. Data for newly agreed sales also remained strong at +36%. However, this had also eased back from levels in September.

Meanwhile, an increasing number of homes are being listed for sale. A net balance of +41% of Scottish respondents pointed to rising numbers of instructions to sell last month.

Looking ahead, a net balance of +14% of respondents said that they expect prices to rise over the next three months. The net balance for sales expectations was more muted through at -4%. On a 12-month horizon, Scottish respondents expect prices to continue to increase but they expect sales activity to ease back.

Gordon Macdonald, FRICS of Allied Surveyors Scotland Plc, in Aberdeen, said: “The market continues to be exceptionally active, against normal seasonal expectations. The balance of types of property in demand though is changing towards those in the country and property that is distant from population centres. Competition for certain, quality houses in the average price ranges is becoming more frequent.”

Jack Mc Kinney FRICS of Galbraith & Lawson in Lanarkshire, added: “The COVID-19 impact won’t be fully felt while the jobs market is supported. Planning is taking too long and is very expensive to meet housing demand at point of need. The housing market is very fluid at present in any event and may require some stability in the light of Brexit.”

Commenting on the UK picture, Simon Rubinsohn, RICS chief economist, said: “The UK housing market remains very busy and the sense is that this will persist over the coming months and into the new year. However, there is understandably more caution about activity looking beyond the first quarter of 2021. Aside from the withdrawal of governments incentives, the market may also find the more challenging employment picture a significant obstacle even with interest rates set to remain close to zero for some time to come.

“That said, medium term expectations for house prices and private rents have barely been dented by COVID according to the latest survey. Indeed, the projections still point to increases likely to exceed wage growth highlighting the ongoing issue around affordability.”

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