The Elite Ayrshire Business Circle

The Elite Ayrshire Business Circle

Wednesday, 15 April 2015

Supply constraints continue to drive up house prices in Scotland

Buyer enquiries and house sales remain 
steady despite lack of supply 

House sales and buyer enquiries in Scotland grew steadily in March, while the number of properties coming onto the market continued to lag behind demand, pushing prices rapidly upwards, according to the latest RICS UK Residential Market Survey.

[Pictured: Sarah Speirs, Director RICS Scotland.]

Throughout Scotland, the supply versus demand imbalance led to 21% more surveyors reporting rise in house prices during March and 27% more surveyors expecting prices to increase over the next three months.

Overall the demand for residential property remained steady in Scotland, with 11% more surveyors reporting an increase in new buyer enquiries, and 9% more surveyors reporting an increase in newly agreed sales during March. 

Sarah Speirs, Director RICS Scotland, said: “The initial boost given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back. The new Land and Building Transaction Tax was implemented at the beginning of April. and we will monitor the potential impact this has had on all market levels. 

“There have been indications of price increases in recent months, as the supply of stock to the market continues to fall. Anecdotal evidence does suggest that election uncertainty and the impact of the drop in oil prices may be having some impact on the market, but underlying the trends visible in the latest survey indicates a very real housing crisis which will urgently need to be addressed by the next UK government.”

Northern Ireland continues to outperform the rest of the UK with the strongest house price growth in March and the highest price expectations over the next three months. However, across much of the rest of the UK, particularly in Wales and Scotland, price gains over the next three months are expected to be much more moderate. 

Robbie Buchanan, Graham + Sibbald commented: “Demand is outstripping supply at present and this has resulted in quicker sales and a modest increase in prices levels for houses.”

In London, a lack of prospective buyers saw enquiries and the number of agreed sales both fall for the 11th consecutive month and 24% more surveyors reported a decline in the number of new properties coming onto the market for sale.  

However, compared to the start of the year when 42% more surveyors reported a decrease in prices, just 13% more surveyors saw prices fall in March and across the whole of the UK, the average surveyor sold 19.5 properties - reflecting activity since Autumn - although it remains some way down on where it was in the early part of 2014. 

RICS housing market survey is the longest running monthly survey of house prices in the UK, collecting data since January 1978. The survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings.

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