Demand rises in Scottish housing market as prices continuing to grow - RICS

Demand for Scottish residential properties grew marginally last month as the number of properties coming on to the market continued to fall, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.

Activity in the Scottish housing market picked up in March, with a net balance of 26 percent of respondents reporting an increase in newly agreed sales, RICS said.

Demand for residential property also grew, although modestly, and continued to outpace new supply coming on to the market, pushing price expectations higher. A net balance of 23 percent more chartered surveyors expect Scottish house prices to rise over the next three months.

Across the UK, while expectations around the number of new houses sales peaked following the Chancellor’s Autumn Statement, this trend has reversed with 2 percent more respondents expecting to see the number of sales fall rather that rise over the coming months. Confidence around house price inflation has also dampened across the UK, with 17 percent of respondents (net balance) expecting to see prices rise over the next three months, compared to 44 percent (net balance) in December.

Director RICS in Scotland, Sarah Speirs, said: “As expected, we saw the final buy-to-let rush drive an increase in newly agreed sales last month and demand has now levelled off. Again we are falling in to see a pick-up in new properties coming onto the Scottish market and, with the slight growth in demand, housing supply is still lagging behind.

“Looking at the wider picture, there are other significant factors that are currently weakening short term confidence in the UK property market. Elections inevitably bring with them periods of uncertainty in the market, and our figures would suggest that next May’s Scottish elections are no exception.”

In the letting market, despite the increased rates of Land and Buildings Transaction Tax now expected to be paid by prospective landlords, rents– while expected to increase – are not predicted to rise any faster than it has in previous months.

Craig Henderson MRICS, Graham & Sibbald, added: “Many areas in Scotland have seen improving confidence through the early part of this year, with price growth seen with improving demand levels.”