NEW research has revealed November saw both lower demand and supply in the Scottish property market – but expectations are more optimistic for 2024.
The latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey found a net balance of -17% of respondents in Scotland noting a fall in new buyer enquiries last month, though this is an improvement on -20% and -35% in the two prior surveys.
Surveyors reported that new instructions fell at the fastest rate since summer, with a net balance of -25% of Scottish respondents experiencing a fall in new instructions to sell. A net balance of -42% of respondents in Scotland reported a fall in sales, while -6% expect a fall in prices over the next quarter.
However, 12-month expectations for both prices and sales improved. A net balance of +22% of respondents in Scotland expects prices to be higher in a year’s time and a net balance of +10% expects the number of sales to be higher in 12 months. Comments from surveyors point to easing mortgage rates as a factor in the improved outlook.
Looking at the lettings market, the ‘imbalance’ between demand and supply is said to have eased. Surveyors report demand for lettings was reported to have fallen flat, down from 13% in October and 29% in September. Looking at landlord instructions, a net balance of -13% noted a fall in supply, which is up from the lowest figure of -80% seen in June. A net balance of 38% of respondents in Scotland expect rents to increase in the three months ahead.
Commenting on the sales market, Greg Davidson MRICS, of Graham + Sibbald in Perth, said, “The base rate looks reasonably stable and lenders are starting to compete for business with competitive mortgage rates. This combined with more reasonable inflation figures seems to have created some reassurance which should create a more positive market into 2024.”
Discussing the lettings market, Grant Robertson FRICS of Allied Surveyors Scotland Plc in Glasgow, added, “Rental demand has fallen but that is always seen around this time and there is some softening on rent levels. With more legislation pending in 2024, uncertainty remains in the market for new entrants.”
Commenting on the UK picture, RICS chief economist, Simon Rubinsohn, said, “The latest RICS Residential Market Survey provides further evidence that sentiment is a little less negative than previously was the case with, critically, the new buyers enquiries indicator finally beginning to stabilise. This is being aided by increased confidence that the interest rate cycle has peaked which is reflected in somewhat more competitive mortgage products coming to the market.
“However, with the cost of money likely to remain elevated for some time to come and the economic outlook still downbeat, it is not surprising that the overall tone to the anecdotal remarks from survey respondents is still quite cautious.”
