RESIDENTIAL property sales in Scotland rose for the first time in more than six months in January and with more momentum than at any other point since November 2020, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
A net balance of 17% of respondents in Scotland reported that newly agreed sales rose through the first month of 2024. This is the first time this balance has been positive since June 2023, and it is at its highest in over three years.
Demand from potential new buyers also rose in January, according to the survey, with this balance turning positive for the first time since March 2022. At +27%, the balance is at its highest level since July 2021.
Supply also increased through January, with a net balance of 15% of respondents in Scotland reporting an uplift in the number of properties coming onto the market. This is also the highest that this balance has been since mid-2021. With demand and supply rising, it is unsurprising that there has been an uplift in sales.
As a result, looking forward, a net balance of 23% of Scottish respondents expect a rise in sales over the next three months. And on the 12-month outlook, a net balance of 62% of Scottish surveyors expect sales to increase, the highest this balance has been since early 2021.
Looking at pricing, a net balance of 4% of surveyors in Scotland noted a rise in prices across the past three months, the second consecutive month this has been in positive territory, though only very marginally so.
However, respondents’ outlook for prices has improved. A net balance of 11% of respondents expects prices to rise over the next quarter, up from 8% in December 2023. And a net balance of +46% of Scottish respondents expects prices to be higher in a year’s time.
Regarding the lettings market, the demand for rental properties continues to outweigh the supply coming to the market in Scotland. A net balance of 33% of respondents noted a rise in tenant demand, however with a net balance of -40% regarding landlord instructions, it appears that the gap between demand and supply is widening. As expected with this trend, rents are anticipated to rise with a net balance of 50% of surveyors in Scotland indicating so.
Commenting on the sales market, Marion Currie, AssocRICS, RICS registered valuer of Galbraith in Dumfries & Galloway said: “Market appraisal and viewing requests increased as the month progressed, and sellers and buyers woke up from the post-Christmas lull. We expect this to increase as we head into February, but realistic values are key to a healthy market this year.
Greg Davidson, MRICS of Graham + Sibbald in Perth added: “2024 has started positively. Competitive mortgage rates and lower inflation figures seem to have brought some confidence and optimism back to the market generally.”
Discussing the lettings market, Carolyn Davies, MRICS of Savills in Dumfries commented: “An ongoing lack of supply of rental properties due to government policy and landlords deciding to exit the market, and considerable strain on renters trying to find any accommodation, not just suitable accommodation.”
Commenting on the UK picture, RICS Senior Economist, Tarrant Parsons, said: “The UK housing market has seen a continued improvement in buyer activity through the early part of the year, supported by the recent easing in mortgage interest rates. Although sales volumes through much of the year ahead are likely to remain relatively subdued compared to the longer-term average, the outlook has now turned modestly brighter on a consistent basis over the past few survey reports.
“However, this is not to say that mortgage affordability isn’t still a significant challenge, and any further unwelcome surprises with regards to inflation may still cause interest rate expectations to be revised. That would then pose a significant risk to any prospective recovery in the months ahead, even if the current prognosis is for the market to see a further pick-up in activity levels.”