NEW research has revealed that new buyer enquiries in Scotland’s housing market are not yet translating into increased sales activity due to the lack of supply of properties to the market.
The findings were released as part of the latest RICS Residential Market Survey.
A net balance of +29% of respondents in Scotland said there was an increase in new buyer enquiries, however there was a fall in new instructions to sell with a net balance of -9% reporting a decrease.
This is leading to a fall in agreed sales, with a net balance of -5% reporting a fall in sales for March.
RICS said that, looking at the first quarter of 2022, there has been a similar pattern overall, with new buyer enquiries rising but instructions to sell falling.
This supply and demand dynamic is leading to a rise in prices, with a net balance of +72% of respondents reporting an increase, which is expected to extend into the April to June quarter with a net balance of +41% of respondents anticipating a continuing rise in property prices.
There is more optimism for the second quarter of the year in terms of expected activity with a next balance of +19% of respondents forecasting an increase in sales.
David Cruickshank, MRICS, from D M Hall LLP, said, “The residential market is still characterised by an unusually short supply of property at every level and abnormally high demand. This has resulted in closing dates, high offers to exclude competition and rising property prices.”
John Brown FRICS from John Brown and Company added, “The high cost of moving and limited choice is restricting supply, particularly of traditional family homes. Prices reflect the competition for period properties. The interest rate increase and higher household costs will come into effect and with fuel cost increases, out of town markets will lose impetus.”
Grant Robertson, FRICS of Allied Surveyors Scotland PLC said, “The continuing squeeze on sales stock together with the restricted release of new homes to the market has resulted in the bull market continuing. Multiple offers at closing and offers often sitting 20% or more over the home report value. With the squeeze on household incomes, something has to give.”