Demand for new homes in Scotland bucked the UK trend, according to the recent RICS Residential Market Survey, with a net balance of 52% more surveyors seeing a rise in new buyer demand.
While across the whole of the UK, the supply and demand picture in August was mixed, in Scotland price momentum and new buyer interest remained firm, with 41% more surveyors reporting a rise in property prices and new buyer demand remaining unchanged from July’s figures (52%).
On the supply side, properties coming onto the market in Scotland remained in positive territory in August with 7% more surveyors reporting an increase in new stock coming onto the books (compared to the UK average of 11% more surveyors reporting a decline in supply). Looking ahead, Scottish surveyors also expect house prices over the next 12 months to increase by 2.6%.
Significantly, members are reporting a rise in the time taken to process transactions, indicating that the Mortgage Market Review, a potential rise in interest rates, and an increasingly acute shortage of conveyancers, are adding between 2-4 weeks onto the time it takes to complete a transaction.
Sarah Speirs, Director RICS Scotland said:
“The Scottish housing market continues to show a greater degree of resilience compared to elsewhere in the country, with more stable price trends and firmer demand, reflecting that affordability is rather less stretched.
“Some of the momentum has come out of the housing market in Scotland of late reflecting in part concerns over a likely rise in the cost of borrowing at some point in the not too distant future. However, we are also being told that the implementation of the recommendations of the Mortgage Market Review is taking its toll on activity and slowing the transaction process by on average up to a month.
“Looking ahead, there are increasing signs that the Scottish market is gradually moving onto a more sustainable footing and we now need investment in regeneration and creation of new stock in order to keep prices at a sustainable level.”