Strong house price growth expected for year ahead in Scotland
House prices across Scotland continue to grow with respondents to the monthly RICS Residential Market Survey expecting further price rises for the year ahead.
Unlike the majority of the UK which has seen house price growth subdue following the new government bedding in, respondents to the July 2019 survey have reported further house price growth across Scotland as expectations for the coming three months also grow.
The net balance for prices last month improved from +25% back in June to +45% in July. This sentiment is also reflected for the year ahead, as 72% more respondents expect house prices to rise for the next 12 months. When compared to the rest of the UK, only Northern Ireland is seeing stronger house price growth.
In a question asked nationally, feedback from contributors is still suggesting that higher priced tiers of the market are facing a more challenging environment. 69% of respondents note that, for properties marketed at over £1m, sales prices are coming in below asking prices (up from 66% in April). However, for properties listed at up to £500,000 and below, 59% of survey participants report sales prices have been at least level with asking (albeit this is slightly down on 62% three months ago).
Looking at sales activity over the past month, four per cent more respondents saw a fall rather than a rise in the number of newly agreed sales in July. Interestingly, the number of enquiries received from would-be buyers and the number of properties being listed for sale also fell in Scotland last month.
Despite the decline in interest from buyers and sellers this month, respondents in Scotland don’t expect much to change, as the near term predicted sales net balance improves slightly to +18% (up from +17% in June).
The continued issue of supply not keeping up with demand continues in the Scottish rental market, as the quarterly seasonally adjusted data points to further rent rises in the coming three months. Demand for rental properties in Scotland improved for the second successive quarter as the number of new rental properties being listed for sale continues to decline. There has been no market improvement in the number of new listings for the Scottish rental market since April 2016. (seasonally adjusted basis)
Andrew Hitchen, BSc MRICS, of Graham & Sibbald in Perth, said: “Demand for low and mid-level family homes remains strong with prices inflated due to low stock levels. New vendor instructions will likely see a downturn due to the commencement of the summer holidays.”
John Brown, FRICS MRTPI, of John Brown and Company in Edinburgh, added: “In July, many are away so market has been quieter, sales are still positive, traditional homes achieved a premium. Less on the market. Competition for homes in popular areas. New Town is a standout. LBTT is restricting sellers /buyers.”
Kevin MacDonald, MRICS, of Graham + Sibbald in Inverness, said: “No noticeable effect of the anticipated slowdown for the start of the holiday period with sales remaining steady. Good levels of interest in available stock from both occupiers and investors with strong prices paid.”