Scottish housing market still resilient in the face of negative news -RICS

In October, house prices in Scotland continued to rise in the face of uncertainty, according to the latest RICS UK Residential Market Survey.

Looking at the UK as a whole, prices are now falling nationally but the regional picture remains varied.

In the October survey, 44 per cent more respondents saw a rise in prices rather than a fall in Scotland.

As prices fall across the UK, with the weakest reading since September 2012, Scotland and Northern Ireland are seeing the strongest growth with the drop mostly stemming from London and the South East, with the price balance in the South East deteriorating during October.

Three-month price expectations are also positive with 19 per cent more respondents predicting a further rise.

This trend continues when looking at the outlook for the year ahead in Scotland, with 58 per cent of respondents predicting a further rise (rather than fall).

The rise in price trends is partially driven by a continuing lack of supply. Looking at new instructions, and the dearth of stock in Scotland, 16 per cent more respondents saw a fall rather than rise in new instructions over the month which continues a trend going back to summer 2015.

Although demand from buyers in Scotland has remained resilient, October saw a slight decline – potentially due to the lack of stock, continued uncertainty, and winter slowdown.  In October, 13 per cent more respondents reported a fall in buyer interest. Near term sales expectations however, continue to rise.

Andrew Hitchen, Graham & Sibbald, Perth, said: “New vendor instructions dipped as expected through the duration of the October break. Good appetite from purchasers together with low stock levels has driven price increases through the lower and middle market.”

In the lettings market, the quarterly (seasonally adjusted) data points to an improvement in tenant demand during the three months to October. Alongside this however, landlord instructions continued to fall, remaining negative and on the back of this, rents are expected to rise.

Simon Rubinsohn, RICS Chief Economist, said: “Although the tone of much of the news flow surrounding the housing market remains downbeat, this continues to disproportionately reflect developments in the south and east of England with the picture remaining rather more resilient in many other parts of the country. Uncertainty about the economic outlook on the back of the never-ending Brexit negotiations appears a key drag on sentiment according to respondents to the survey.”