NEW research has revealed that the number of home sales in Scotland fell flat in April, following the slight increase in mortgage rates recently.
The findings were highlighted in the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey. However, respondents retain a positive outlook for prices and transactions as more properties are listed for sale.
A net balance of -3% of respondents in Scotland was reported for newly agreed sales in April, down from 13% in March and up from -9% in February.
The number of properties listed for sale increased though, with a net balance of 26% of surveyors in Scotland reporting a rise in new instructions to sell, the fifth consecutive month this balance has been in positive territory.
Demand also continued to rise, with a net balance of 12% of Scottish respondents noting new buyer enquiries increased. Surveyors anticipate that sales with rise over the next three months.
Looking at pricing, a net balance of 21% of surveyors in Scotland reported prices rose over the last three months, the second highest balance across all UK regions after Northern Ireland. Surveyors also anticipate prices will continue to rise in the short-term albeit at a slower rate than seen previously.
In the Scottish lettings market, the ‘imbalance’ between demand and supply continues, with a net balance of 33% of surveyors noting a rise in tenant demand, and a net balance of -32% of surveyors reporting a fall in supply coming to the market. A net balance of 33% of respondents expect rents to increase over the next three months.
Commenting on the sales market, Charlie Barrett, MRICS of DM Hall Chartered Surveyors, said, “Market activity appears relatively balanced and steady. The average property is selling very slightly over Home Report valuation, indicating a very gradual increase in prices. Anecdotally, it is understood interest levels are increasing with more closing dates being set and viewing numbers up.”
Discussing the rental market, Carolyn Davies, MRICS of Savills, added, “There has been a flurry of activity with market rent “rent reviews” since the lifting of the rent cap, and much discussion about getting rents to the market rent ahead of the next trench of housing legislation. The continued lack of supply of property in the lettings marketplace.”
Regarding the UK picture, Simon Rubinsohn, chief economist, RICS, commented, “Feedback to the latest RICS survey demonstrates the sensitivity of the sales market to interest rates at the present time, given the continuing challenge around affordability. A modest back up in mortgage pricing has contributed to the flatlining in the buyer enquiries metric over the past month, as well as the slightly more cautious signals around near-term expectations.
“That said, there is still a strong perception that activity in the market will pick up in the latter part of the year and into 2025, irrespective of any political uncertainty around the General Election. As far as the lettings market is concerned, an increasing number of respondents are also drawing attention to affordability constraints, and this is reflected in a more modest pace of rental growth. But a fundamental problem in the market across much of the country remains the imbalance between demand and supply with new instructions continuing to decline.”
