Housing market activity flat, but prices rise as demand exceeds supply - RICS

The number of properties coming onto the market (instructions to sell) failed to increase again in February, according to the survey, continuing a constrained supply trend that has been evident since 2015. As a result, newly agreed sales were flat last month, despite a rising number of new buyer enquiries.

Due to this gap between demand and availability, average house prices rose again, according to respondents, with a net balance of +31 per cent of Scottish surveyors reporting increased values in the latest survey. This was significantly above the UK average and one of the highest readings of the UK nations and regions.

Encouragingly though, surveyors in Scotland are optimistic about the short-term outlook for activity in the market as we move into the spring months. A net balance of +39 per cent of respondents expect the number of sales to increase in the three months ahead, from their low base, with anecdotal evidence suggesting that surveyors expect more potential vendors to bring their properties to the market when the weather improves.

RICS Director in Scotland, Gail Hunter, said: “Surveyors have continued to report that a lack of supply is both constraining activity in the market and leading to prices being pushed upwards. However, looking ahead, there is an anticipation that this situation will improve in the spring months, with more properties becoming available and the backlog of potential buyers potentially easing. The expectation is that if the supply side improves, activity should increase and the upward pressure on prices should ease somewhat.”

main findings of the RICS survey:

The headline price balance for Scotland was +31 per cent in the latest survey, meaning that 31 per cent more surveyors said that prices rose in the past three months than those who said they fell.

The three-month price expectations balance, at +15 per cent, remains positive. Meanwhile, three-month sales expectations data at +39 per cent picked up and was firmly positive.

Newly agreed sales (+4 per cent) were broadly flat in February according to the balance of respondents, whilst there was an increase in new buyer enquiries (+16 per cent). Significantly, instructions to sell failed to rise again (-4 per cent).