Shortage of supply continues to push up property prices in Scotland

A shortage of homes becoming available for sale in Scotland is continuing to push house prices upwards, according to the latest residential market report from chartered surveyors. A net balance of +21% of Scottish surveyors responding to the survey said that house prices rose in January, which was above the UK figure of +8%, says the report from the Royal Institution of Chartered Surveyors (RTCS). This comes as a net balance of -12% of Scottish surveyors report a fall in the number of homes becoming available for sale, the tenth consecutive month that the data for new instructions to sell has been in negative territory. With new buyer enquiries continuing to increase, albeit at a slower rate than at the end of last year, according to the balance of respondents, this suggests that there is a widening gap between availability and demand that will exacerbate supply constraints. That said, Scottish surveyors remain relatively upbeat about the three month outlook for the market. A net balance of +32% expect sales activity to increase in the February to April period and a net balance of +7% expect prices to rise in that timeframe. ‘Surveyors remain positive about the prospects for the housing market in Scotland. However, they also point to a shortage of properties becoming available for sale, which will have a constraining effect on sales activity and potentially push up prices further,’ said Gail Hunter, RUCS director in Scotland. ‘Anecdotally, surveyors continue to report that the changes to the Land and Buildings Transaction Tax are having an ongoing negative impact on instructions to sell in the middle to the prime brackets of the market, and this is having detrimental trickledown effect in other house price brackets,’ she added. One surveyor, Grant Richardson of Allied Surveyors in Glasgow, pointed out that the level of stock in the popular West End area of the city is at an historic low. ‘Current sales numbers can’t be sustained without restocking,’ he said.