Scottish house prices rise despite fall in new buyer enquiries

Image credit: Shutterstock

NEW research has found that Scottish house prices are still rising despite the impact of the latest lockdown measures on homebuyers.

The latest RICS UK Residential Market Survey revealed the sector started 2021 on a ‘weaker footing’ despite being allowed to remain open during the current lockdown, with Scottish surveyors reporting activity lower than in December.

34% more Scottish respondents reported a decline in new buyer enquiries in January than reported a rise, indicating fewer new buyers active in the market. This ends a run of seven consecutive months when new buyer enquiries increased.

There was also a decline in the number of listings, with 71% more Scottish respondents noting a fall in new properties going onto the market than reporting a rise. January also saw sales of homes drop, with 27% more respondents in Scotland reporting falling numbers of sales rather than rising.

Despite this, house prices in Scotland have continued to rise, with a net balance of +52% of participants seeing an increase in January. However, respondents expect a ‘flat’ picture over the next three months.

David Cruickshank MRICS of D M Hall LLP in Elgin said, “Covid restrictions have severely impacted on supply, with a marked drop in the quantity of homes being placed on the market during January, when compared to January 2020.”

Alan Kennedy MRICS of Shepherd Surveyors in Fraserburgh commented, “During the current period of lockdown, the number of new properties coming onto the market has decreased, though buyer interest remains strong and the market is relatively buoyant. Sellers need to be made more aware that the property market is still open and that it may be beneficial to act now.”

Commenting on the UK picture, Simon Rubinsohn, RICS chief economist said, “The latest RICS survey suggests that despite attempts to keep the housing market open through the latest lockdown, there has been perhaps an inevitable impact on the level of activity in the sector with both enquiries from potential buyers and new instructions slipping back.

“That said, actual transaction numbers will remain firm over the next couple of months reflecting the completion of deals that in many cases were agreed through the back end of last year. The appeal of properties with more room and outside space is, meanwhile, a theme that continues to be strongly evident in the responses to the survey.

“Alongside this, renewed concerns are evident regarding the supply of properties in the rental market. Changes in the regulatory framework as well as the tax regime are frequently cited as drivers of this trend which is widely seen as pushing rents higher in most parts of the country despite current affordability concerns.

“London is a notable exception from this trend with private rents viewed as remaining under pressure over the coming months.”