Scottish house prices continued to increase in December

Scottish house prices continued to increase in December

House prices and home sales activity in Scotland continued to rise last month, according to the December Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS).

However, respondents anticipate the latest lockdown restrictions, related economic challenges and the end of the Stamp Duty holiday to weigh on activity over the next few months.

A net balance of +53% of Scottish respondents to the latest survey reported rising prices in the December report, which was lower than +67% reported in November, but is still a strong reading. Surveyors also saw the number of sales increase in December, with a net balance of +15% saying that the number of newly agreed sales in Scotland was higher.

However, the number of properties listed for sale was lower than in November - the net balance for new instructions to sell was -4% in the latest survey, a second consecutive month in which the number of new instructions failed to increase - and surveyors are less optimistic than they were about the three-month outlook.

More respondents in Scotland said that they expect sales activity to reduce in the next three months than said they expected it to rise (a net balance of -5% compared to +11% in November). With regard to prices, the three month outlook is flat (a net balance of zero).

Commenting on the UK picture, Simon Rubinsohn, RICS chief economist, said: “Although the housing market remains open for business in the midst of the latest lockdown, there is a sense from respondents to the survey that the new restrictions will still impact on transaction activity over the coming months. This is most visible in the negative reading for sales expectations over the next three months when typically, with the expiry of the stamp duty holiday approaching, this series would be expected to remain firmly in positive territory.

“Looking beyond this immediate time horizon, the feedback from RICS members is that the uplift in prices over the past year will be sustained, for good or ill, as the macro picture gradually improves on the back of the rollout of the Covid vaccination programme. More significantly, private rents are envisaged to outpace price gain as supply continues to fall short of demand with anecdotal reports of landlords exiting the market.”

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