House prices and private rents expected to increase
House sales in Scotland will continue a downward trend into 2017 due to a lack of stock while prices are expected to rise over the next three months, surveyors have suggested.
The November RICS Residential Market Survey found that while the number of prospective buyers in the Scottish housing market has increased for the second consecutive month in November, with 21 per cent more surveyors reporting a rise in new buyer enquiries rather than a fall, sales were more or less flat over the month; with five per cent more surveyors actually reporting a dip in transaction volumes.
Supply shortages remain a constraining feature in Scotland in November and the growth in demand, albeit only modest, alongside a lack of new instructions, has led to a further increase in prices.
Indeed, as stock continues to dwindle, the headline RICS price balance for Scotland continued to signal rising prices with 26 per cent more respondents seeing a rise, extending an uninterrupted price growth dating back to 2013.
According to the survey, house prices are expected to rise over the coming three months with 25 per cent more surveyors anticipating an increase (rather than a decline).
In the lettings market, tenant demand continues to outpace supply across most areas and rents are also expected to continue to rise.
Simon Rubinsohn, RICS chief economist, said: “A key issue for the housing market is the slowdown in transaction activity since the spring which is clearly being reflected in the RICS Agreed Sales data as well as in official figures.
“Although there are some signs that the numbers may begin to edge upwards in the New Year, the combination of macro uncertainty, the on-going supply shortfall, with stock levels around historic lows, and the myriad of tax changes impacting on buyers suggest that any pick-up in activity will be relatively modest.
“This is significant not just for the housing market itself but also for the wider economy given how much of consumer spending is tied in with home purchases.”