NEW research has revealed that the Covid-19 lockdown is expected to impact the Scottish housing market for the rest of the year.
The March 2020 RICS Residential Market Survey found a net balance of -81% of Scottish respondents reported a fall in buyer demand, with newly agreed sales seen to have dropped, with 56% more respondents in Scotland reporting a fall. New homes coming onto the market also reduced over the past month, with a net balance of -75% of respondents reporting a downturn.
RICS said sales and price expectations for the next three months have turned ‘deeply negative’, while the net balance for three-month price expectations is now -87% (down from +23% in the previous survey) and the net balance for three-month sales expectations is -100% (down from +25%).
Looking forward to the next 12 months, respondents were slightly less negative, although 52% expected sales to fall further rather than rise.
Despite the challenges, prices were reported to have risen over the past three months, with a net balance of +34% of Scottish surveyors saying prices increased in the January to March period.
In the lettings market, March has seen new landlord instructions fall with -40% more Scottish respondents reporting a decline. Tenant demand in Scotland also fell as near-term rent expectations slipped into negative territory for only the second time in 32 months.
Kieran Bonner, MRICS, of J&E Shepherd in Stirling said, “It was actually a very positive March until the Covid-19 crisis hit. A period of lockdown and uncertainty lies ahead.”
In terms of the UK picture, Simon Rubinsohn, RICS chief economist said, “The results of the latest RICS survey capture the period during which the economy moved into lockdown so show a somewhat mixed picture. But critically, the key forward looking indicators clearly reflect the emergency measures in place. The fact that responses are negative not just at the three but also the twelve month time horizon is significant in suggesting that the legacy of Covid-19 could be such that any return to what might be described as ‘normality’ in the economy will take time and households will remain cautious for a while.
“Of course, the primary focus of government is at this stage the health of the nation and defeating coronavirus and it may be a little premature to be planning for the economic recovery. However, the feedback from the survey does imply that further government interventions both in the wider economy and more specifically in the housing market may be necessary to aid this process supporting businesses and people back into work.”