Surveyors in Scotland anticipate that house prices will increase through the coming months according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey as both demand and supply remain steady.
A net balance of 28% of surveyors in Scotland reported that prices rose over the past three months. This is compared to the UK average which sits at -17%. Scotland saw the second highest pricing balance across all UK regions after Northern Ireland.
Scottish surveyors also appear optimistic about the short-term outlook as a net balance of 25% of Scottish respondents anticipate prices to rise over the next three months. This is up from 11% that was seen in April.
The sales outlook is also relatively upbeat, with a net balance of 35% of respondents anticipating an increase. Whilst remaining positive, this is lower than has been seen in previous surveys (net balances of 40% and 52% in April and March respectively), but only marginally so.
Looking at demand, a net balance of 5% of surveyors in Scotland noted that there was a rise in new buyer enquiries, the fifth consecutive month that this balance has been in positive territory.
Similarly supply levels also continued to edge upwards as a net balance of 20% of Scottish respondents reported an increase in new instructions to sell.
On the lettings market, demand rose at the fastest rate seen in nearly a year with a net balance of 57% of surveyors reporting an increased. On the other hand, supply was broadly flat. As a result of the high demand and lack of supply, rents are expected to increase at the sharpest rate since August 2022, with a net balance of 86% of Scottish surveyors anticipating a rise over the next three months.
Commenting on the sales market, Grant Robertson, FRICS of Allied Surveyors Scotland in Glasgow said: “Supply issues are easing slightly due to the unexpected delay in base rate changes driving some lending rates up from two months ago. Homes are staying longer on the market giving greater choice. This needs to be seen against a very low level of stock over the past few years.”
Thomas Baird, MRICS of Select Surveyors in Glasgow added: “Mortgage rate cuts particularly to the struggling buy-to-let sector should have a positive impact on the rest of the year.”
Discussing the lettings market, Ian Morton, MRICS of Bradburne & Co in St Andrews commented: “Demand from tenants continues with a lack of suitable properties available to let. Rent increases continue after some relaxation of government controls in the spring.”
Commenting on the UK picture, Tarrant Parsons, RICS Senior Economist, said: “The recent recovery across the UK housing market appears to have slipped into reverse of late, with buyer demand losing momentum slightly on the back of the upward moves seen in mortgage rates over the past couple of months. Nevertheless, expectations point to this delaying, rather than derailing, a modest improvement going forward. Indeed, respondents continue to envisage a more positive trend in sales activity coming through over the year ahead, although this is likely predicated on the Bank of England being able to start lowering interest rates in the coming months.”
