House prices rise but Scottish surveyors braced for impact of latest restrictions

Shutterstock

NEW research has shown that house prices and sales activity increased in Scotland in December, but the latest lockdown restrictions and economic challenges are anticipated to have an impact over the coming months.

Those findings were revealed in the December RICS (Royal Institution of Chartered Surveyors) Residential Market Survey.

A net balance of +53% of Scottish respondents reported rising prices in the December report, which was lower than +67% reported in November. Surveyors also saw the number of sales increase, with a net balance of +15% saying the number of newly agreed sales was higher.

However, the number of properties listed for sale was lower than in November – the net balance for new instructions to sell was -4% in the latest survey – with surveyors now less optimistic than they were about the three-month outlook.

More respondents in Scotland said they expect sales activity to reduce rather than rise in the next three months. With regard to prices, the three month outlook is flat.

David Cruickshank MRICS of D M Hall LLP in Elgin, said, “The market was quiet over the Christmas period and it has been a slow start to 2021 with uncertainty due to Covid reducing the number of new sale instructions. A clearer picture will though emerge by the end of the month.”

Greg Davidson MRICS of Graham + Sibbald in Perth, commented, “2020 saw the Scottish country house market come to life with demand significantly outstripping supply, resulting in strong and increasing sale prices and multiple offers at closing dates. Following a period of further Covid uncertainty early in 2021, spring should reinvigorate this market again.”

Commenting on the UK picture, Simon Rubinsohn, RICS chief economist, said, “Although the housing market remains open for business in the midst of the latest lockdown, there is a sense from respondents to the survey that the new restrictions will still impact on transaction activity over the coming months. This is most visible in the negative reading for sales expectations over the next three months when typically, with the expiry of the stamp duty holiday approaching, this series would be expected to remain firmly in positive territory.¬†Looking beyond this immediate time horizon, the feedback from RICS members is that the uplift in prices over the past year will be sustained, for good or ill, as the macro picture gradually improves on the back of the rollout of the Covid vaccination programme. More significantly, private rents are envisaged to outpace price gain as supply continues to fall short of demand with anecdotal reports of landlords exiting the market.”