Brexit hits activity in the Scottish housing market as prices rise

The Royal Institution of Chartered Surveyors (RICS) said uncertainty fuelled by the EU Referendum, coupled with the higher stamp duty now in place on investment property purchases, has resulted in a marked drop in activity in the Scottish housing market.

There was also a further fall in the supply of properties coming on to the Scottish housing market in June, highlighting the continued challenge presented by the lack of stock.

Although Scottish house prices continue to rise for the time being, short term expectations have turned, with a net balance of 23 per cent more surveyors predicting a drop in house prices over the next three months.

Rents, however, are expected to continue to rise over the same time horizon.

RICS chief economist, Simon Rubinsohn, said: “Big events such as elections typically do unsettle markets so it is no surprise that the EU referendum has been associated with a downturn in activity. However, even without the build up to the vote and subsequent decision in favour of Brexit, it is likely that the housing numbers would have slowed during the second quarter of the year following the rush in many parts of the country from buy to let investors to secure purchases ahead of the tax changes.

“RICS data does suggest that the softer tone to the market will persist over the coming months but the critical influence looking further is how the economy performs in the wake of the uncertainty trigger by the vote to leave.

“Respondents to the survey are understandably cautious but with interest rates heading lower and sterling significantly so, it remains to be seen whether the concerns about a possible stalling in both corporate investment and recruitment are justified.”