RISING borrowing costs and geopolitical uncertainty negatively impacted the Scottish housing market in March, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
Whilst prices were reported to have continued to rise, according to a net balance of +36% of respondents, demand seems to have softened. A net balance of -7% of respondents in Scotland reported new buyer enquiries fell through March, and agreed sales were reported to have been marginally lower in number.
A net balance of -13% of respondents in Scotland reported instructions to sell fell for the first time since the end of last year, indicating that seller confidence has also been impacted.
Respondents, on balance, expect prices to be lower in three months for the first time in over two years. And expectations for sales over the next three month are broadly flat.
Commenting on the sales market in Scotland, Ian Morton MRICS of Bradburne & Co in St Andrews said, “There is a general lack of confidence in the sales market from sellers and buyers due to world events, increasing living costs, mortgages and upcoming elections creating uncertainty.”
However, Marion Currie ASSOCRICS, RICS registered valuer at Galbraith in Dumfries & Galloway added, “It was a busy end to March with several high value properties going under offer, reinforcing optimism for the spring/summer market. No signs yet of international turbulence affecting the market here in Dumfries & Galloway.”
Commenting on the UK picture, Tarrant Parsons, RICS head of market research and analysis, said, “The mood across the UK housing market has shifted markedly over the past couple of months. What had been a cautiously improving picture for activity has been knocked off course by the wider macro fallout from the Middle East conflict, as the renewed deterioration in the mortgage rate outlook has proved particularly challenging.
“Indeed, with average fixed rates climbing back above 5% according to some sources, it is unsurprising that buyer demand has softened. The path ahead hinges on whether or not recent surges in oil and energy costs begin to reverse in what remains a highly uncertain geopolitical environment.”
