Surveyors remain cautious despite housing market rebound



The Scottish housing market saw a rebound in interest and activity during July but surveyors remain cautious about the months ahead due to the uncertain economic outlook. 

As new buyers flooded into the market, the Royal Institution of Chartered Surveyors (RICS) Residential Market Survey indicated a net balance of +100% of Scottish respondents seeing an increase in new buyer enquiries, and a net balance of +79% seeing a rise in newly agreed sales. Similarly, new instructions being listed for sale rose sharply, evidenced by a net balance of +68% of respondents reporting an increase.

However, the net balance for sales expectations over the next three months is a modest +5%, indicating that respondents expect sales growth to plateau. Respondents are even more cautious about the longer-term outlook for activity. A net balance of -31% was recorded for sales expectations looking 12 months ahead.

With regard to prices, a net balance of +6% of respondents was recorded from three-month price expectations suggesting surveyors expect prices to be broadly flat in the next few months.

With regard to the next year, respondents expect prices to edge up. A net balance of +34% was recorded for 12-month price expectations.

Anecdotally, respondents point to the backlog built up over the lockdown period as a reason for the current market activity levels. They also point to the ending of the furlough scheme as a concern with regard to the housing market.

Alan Kennedy MRICS of Shepherd Surveyors in Fraserburgh said: “Since the property market reopened on June 29th there has been an exceptionally high number of properties coming onto the market and high levels of demand from prospective purchasers, particularly in the low-mid price range.”

Simon Rubinsohn, RICS chief economist, added: “The strong impetus provided to the housing market is evident both in the results of the RICS survey and many of the anecdotal comments from respondents. However, it is interesting that there remains rather more caution about the medium term outlook with the macro environment, job losses and the ending or tapering of government support measures for the sector expected to take their toll. Significantly, some contributors are now even referencing the possibility of a boom followed by a bust.

“Meanwhile one of the other notable aspects of the survey is the feedback that there is a greater interest in properties that offer some features that help better manage future lockdowns whether it is access to green spaces, gardens or balconies.”

In the lettings market, Scottish respondents noted a firm recovery in tenant demand over the three months to July, posting a net balance of +29%. This denotes a sharp rebound compared to the reading of -22% returned in the previous survey.

With regards to new landlord instructions, a net balance of +40% of respondents reported a pick-up over the survey period. Rental growth expectations in Scotland for the next three months also recovered during July, with the net balance picking up to +22% from 0% previously.

Tags: RICS



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