Scottish surveyors optimistic despite fall off in new buyer demand

Home sales in Scotland are expected to rise over the next three months, despite a falloff in new buyer enquiries during June, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.

A net balance of 26% of respondents to the survey in Scotland expect the number of sales to rise through the third quarter, up from the 22% seen in May and 8% in April.

Surveyors also remain upbeat about prices, with a net balance of 18% of respondents anticipating that prices will rise over the next three months. This follows a positive past three months, when the headline price balance remained at +29%.

Demand, however, is reported to have fallen through June. A net balance of -26% of surveyors reported that new buyer enquiries decreased in the most recent survey after a period of five months, when this balance was in positive territory.

Surveyors in Scotland also note that supply was lower last month, with a net balance of -32% of respondents reporting a decrease in new instructions to sell, the lowest this balance has been in just under a year.

With supply and demand both subdued, it is unsurprising that a net balance of -15% of surveyors in Scotland reported a fall in sales, down from 4% in May.

Anecdotally, respondents pointed to factors including the election, the Euros and the Bank of England holding interest rates as factors in slower enquiries and newly agreed sales over the past month.

On the lettings front, the imbalance between supply and demand continues to drive rents up, however at a less severe rate than reported in May. A net balance of 33% of surveyors in Scotland reported a rise in demand (down from 57%), and a net balance of -17% of respondents noted a fall in landlord instructions (down from falling flat in May).

Scottish surveyors still anticipate rents will rise – a net balance of 50% – however at a slower rate than seen previously, when the balance in the survey previous was 86%.

Commenting on the sales market, Marion Currie, an associate at Galbraith in Dumfries & Galloway, said: “A positive start to the summer season, with properties at sensible prices leading to successful sales.”

Adrian Stott, partner at J and E Shepherd in the Lothians, added: “Supply is now more in balance with demand.; we are also no longer seeing big differences between home report value and sales price.”

On the rental market, Carolyn Davies, lettings manager at Savills in Dumfries, commented: “There is a continued lack of supply to the market with rents rising as a result.

“More tenants are now querying rent reviews as a result of the removal of the rent cap and increases larger to try and reduce the differential between existing tenancies and new tenancies.”

Commenting on the UK picture, RICS’ senior economist Tarrant Parsons said: “Although activity across the housing market remained subdued last month, forward looking aspects of the results did improve slightly.