House prices in Scotland will see an average increase of 4 per cent over the course of next year and 6 per cent across the UK, according to the RICS housing forecast for 2016.

Although housing has climbed the policy agenda, with supply issues dominating the private housing market the RICS forecast suggests that the likely increase in prices in 2016 will outstrip any rise in household income.

Simon Rubinsohn, RICS chief economist, said: “Housing has clearly leapt up the government’s agenda but despite the raft of initiatives announced over the past year, the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next twelve months. Lack of stock will continue to be the principal driver of this trend but the likely persistence of cheap money will compound it for the time being.

“Looking further out, there is some justification for taking a more optimistic view of new build with significant incentives being put in place to deliver starter homes. While this may not on its own stem the upward trend in house prices, it could help to slow the rate of growth to something closer to the probable rise in household incomes.

“Critically our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership at the expense of other tenures. Discouraging Buy to Let could see private rents take even more of the strain if institutional investment doesn’t increase significantly, particularly given the likely reduced flows of social rent property going forward.”

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