RICS: House prices rising but surveyors cautious over outlook
House prices and home sales activity increased in Scotland according to the December Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
However, respondents anticipate the latest lockdown restrictions, related economic challenges and the end of the Stamp Duty holiday to weigh on activity over the next few months.
A net balance of 53 per cent of Scottish respondents to the latest survey reported rising prices in the December report, which was lower than 67 per cent reported in November. Surveyors also saw the number of sales increase in December, with a net balance of 15 per cent saying that the number of newly agreed sales in Scotland was higher.
However, the number of properties listed for sale was lower than in November: the net balance for new instructions to sell was -4 per cent in the latest survey, a second consecutive month in which the number of new instructions failed to increase - and surveyors are less optimistic than they were about the three-month outlook.
More respondents in Scotland said that they expect sales activity to reduce in the next three months than said they expected it to rise (a net balance of -5 per cent compared to +11 per cent in November). With regard to prices, the three-month outlook is flat (a net balance of zero).
David Cruickshank MRICS of DM Hall in Elgin, said: “The market was quiet over the Christmas period and it has been a slow start to 2021 with uncertainty due to Covid reducing the number of new sale instructions. A clearer picture will though emerge by the end of the month.”
Greg Davidson MRICS of Graham + Sibbald in Perth, commented: “2020 saw the Scottish country house market come to life with demand significantly outstripping supply, resulting in strong and increasing sale prices and multiple offers at closing dates. Following a period of further Covid uncertainty early in 2021, spring should reinvigorate this market again.”
Commenting on the UK picture, Simon Rubinsohn, RICS chief economist, said: “Although the housing market remains open for business in the midst of the latest lockdown, there is a sense from respondents to the survey that the new restrictions will still impact on transaction activity over the coming months. This is most visible in the negative reading for sales expectations over the next three months when typically, with the expiry of the stamp duty holiday approaching, this series would be expected to remain firmly in positive territory.
“Looking beyond this immediate time horizon, the feedback from RICS members is that the uplift in prices over the past year will be sustained, for good or ill, as the macro picture gradually improves on the back of the rollout of the Covid vaccination programme. More significantly, private rents are envisaged to outpace price gain as supply continues to fall short of demand with anecdotal reports of landlords exiting the market.”