SCOTTISH house prices are predicted to rise through the first quarter of 2024, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
This marks the first time Scottish respondents’ three-month expectations for prices have moved into positive territory since May 2022.
RICS revealed this coincides with an overall improvement in sentiment within the Scottish residential market, according to respondents, which appears to be linked to the trend towards lowered mortgage rates. Along with Northern Ireland and the north west of England, Scotland is one of the only parts of the UK where respondents expect prices to move higher over the course of 2024.
A net balance of +8% of respondents in Scotland anticipate prices will increase over the next three months. On a 12-month outlook, the net balance is +12%. This follows a ‘relatively flat’ picture in the three months to the end of December.
Looking at demand, a net balance of -6% of respondents in Scotland reported a fall in new buyer enquiries – the least negative this balance has been since February 2023.
In terms of new instructions to sell, surveyors in Scotland reported supply levels were flat through December, but this was the first time in two years that instructions to sell were not seen to fall.
Newly agreed sales were reported to have fallen at the slowest rate since July 2023. Indeed, respondents in Scotland are more optimistic on the sales outlook with a net balance of +27% of respondents anticipating sales to rise over the first quarter of 2024. The net balance for 12-month sales expectations is +30%.
Looking at the lettings market, the ‘imbalance’ between demand and supply remained through December. Surveyors report demand for lettings has risen, with a net balance of +29% of Scottish respondents reporting a rise. Looking at landlord instructions, a net balance of -57% noted a fall in supply, falling from -13% the previous month. With this supply and demand dynamic, a net balance of +43% of respondents in Scotland expect rents to increase in the three months ahead.
Greg Davidson, MRICS of Graham & Sibbald in Perth, said, “The underlying market seems stable and the improving mortgage rates and inflation figures should help support a cautiously optimistic start to 2024.”
Marion Currie, AssocRICS, RICS registered valuer of Galbraith, in Dumfries & Galloway, added, “The seasonal lull was as expected in December, but some interesting movement remained. However, moving into 2024 realistic pricing and managing seller expectations will be the best strategy in attracting buyers.”
Discussing the rental market, Craig Henderson, MRICS, of Graham & Sibbald LLP, in Ayrshire, commented, “Landlords are seeing any properties they have available for let, being snapped up quickly by tenants. I believe that many landlords have exited the market in the last few years, and as a consequence, as demand increases, we will see rents rise markedly as rent restrictions on landlords come to an end.”
