Transactions in Scottish housing market remain steady as prices increase

Scottish housing market activity continues to grow in contrast to a slowdown in the rest of the UK, according to a new report.

Fresh sales across the UK declined for the 16th month in a row compared to growth in Scotland since January, the latest Royal Institution of Chartered Surveyors survey found.

Newly agreed sales across the UK saw the sixteenth successive month of decline, while sales in Scotland have remained in positive territory since January 2018.

The picture north of the border remains firm, with 37 per cent more respondents predicting sales to increase over the next three months.

New buyer enquiries were also strong during June, with a net balance of 33 percent more chartered surveyors reporting an increase in demand for new homes across Scotland.

The number people looking to buy in Scotland has been steady for the last quarter, as the national picture remained flat, prolonging the UK trend which dates back to late 2016.

For the second month in a row new instructions have risen, with 2 per cent more respondents seeing an increase in the flow of properties being put up for sale.

Despite this small growth in supply, demand continues to outpace and drive up prices, raising questions of affordability. At the headline level the Scottish price balance remained strong in June, with a net balance of 43 per cent of chartered surveyors reporting an increase. House price growth has remained positive in the Scottish housing market since April 2013.

Looking at the lettings data, new instructions coming on to the Scottish market dropped again* (a net balance reading of -13%). Anecdotal remarks, unsurprisingly, draw attention to role the change in tax treatment on investment property has played in driving this trend. An increase in tenant demand, teamed with the drop in new properties available, has resulted in the rent expectations pointing towards further increases in rents in the shorter term.

Simon Rubinsohn, RICS Chief Economist, added: “While we are seeing a rise in house prices in Scotland, unlike many parts of the UK, there is also consistent growth in demand and transaction levels to support this. However, lack of supply across both the sales and rental market continue to put upward pressure on prices, with risks of certain areas becoming unaffordable.”