Thursday, 8 May 2014
Sustained demand across the Scottish housing market in April
RICS UK Residential Market Survey, April 2014
Demand within the Scottish housing market remained steady during April, with a net balance of 23 percent of respondents reporting an increase in new buyer enquiries, according to the latest RICS UK Residential Market Survey.
Overall the latest figures reveal a constrained property market, which continues to be marred by weak supply and high demand. While respondents across nine UK regions reported declines in new property for sale coming onto the market, Scotland had a more positive April, with a net balance of 12 percent more respondents reporting an increase in new instructions.
In the month that also saw new lending regulations brought into effect (the Mortgage Market Review), respondents reported that the average ‘perceived’ Loan to Value (LTV) ratios among first time buyers climbed to 86 percent across the UK, with an even higher average in Scotland.
Significantly, there now appears to be a broadening out of the recovery away from London, with increasingly upbeat price responses likely across the country going forward. In Scotland 46 percent more chartered surveyors predict prices over the next three months will rise, rather than fall, and by comparison in London, 49 percent more respondents conveyed similar expectations.
Sarah Speirs, Director RICS Scotland, said: “House prices in general look set to remain firmly on the upward trend, however, the critical issue for the market remains the lack of second hand supply, despite a slight increase in April. It is too early to conclude whether this will undermine the positive trend in transactions volumes, but clearly the absence of properties to buy will ultimately be a factor in influencing the ability of people to move homes.
“That said, despite the disappointing trend in instructions, a net balance of 45 percent of surveyors expect to see sales levels increase as we head into the summer.”
Greg Davidson MRICS of Graham + Sibbald’s Perth office commented: “There have been good activity levels in the early part of 2014, and the increase in transactions is encouraging and a real sign that the residential market is turning a corner. Some sectors remain slower than others but sentiment is generally positive.”
In the rental sector, there continues to be modest growth in tenant demand although greater mortgage availability and the ‘Help to Buy’ Scheme have seen the appetite to rent lose some momentum in recent quarters. Even so, rent expectations in the next 3 months are expected to grow with 31 percent more chartered surveyors predicting an increase.