ACTIVITY from both homebuyers and sellers was strong in Scotland for the second successive month in February, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
New buyer enquiries and instructions to sell were both reported to have risen firmly again, following on from a strong first month of the year.
A net balance of 22% of respondents in Scotland said that enquiries from potential buyers were higher in February than they were in January. A net balance of 25% said the same of instructions from vendors to sell their properties. This was the highest this balance has been since July 2021.
As a result, surveyors expect house sales to pick up over the next three months, though only marginally so, and over the next 12 months. A net balance of 24% of respondents said that they expect sales volumes to be higher in a year.
Looking at pricing, a net balance of 10% of surveyors reported that prices rose through the month of February. This trend is expected to continue, with a net balance of 18% of Scottish respondents anticipating a rise in residential house prices in the three months ahead. A net balance of 48% expects prices to be higher in a year.
Taking a look at the lettings market, demand for rental property in Scotland is reported to have fallen flat through the month of February. Landlord instructions fell according to the latest survey, with a net balance of -57% of surveyors noting that supply has decreased. With this, rental price expectations have eased marginally, with a net balance of 43% of Scottish respondents anticipating a rise in rental prices, down from 50% the month previous.
Commenting on the sales market, Craig Henderson, MRICS, Graham & Sibbald LLP, in Ayrshire said: “There are clear signs as we move into March that we are seeing more sellers coming to the market, with activity levels improving through the month of February. I expect the market to continue much as it has in the last 12 months. Prices at or around home report are likely to continue in most cases.”
Regarding the lettings market, Ian Morton, MRICS, Bradburne & Co in St Andrews added: “Landlords are hoping for more freedom to adjust rents from next month when the new government policy is implemented. Landlords of holiday lets are negative regarding the additional costs in complying with legislation.”
Commenting on the UK picture, Simon Rubinsohn, Chief Economist, RICS, says: “The February RICS survey provides some grounds for encouragement around the sales market with not just buyer interest staying positive for the second successive month but also the uplift in new instructions to agents. Whether the increase in stock coming back to the market will be sustained is likely to be a critical factor in explaining how things play out over the balance of the year especially with new build likely to remain constrained. Significantly, the rise in the number of appraisals taking place points in the right direction. And the government will be hoping that this trend is given a boost by the change to CGT announced in the Budget.
“Meanwhile, there are signs that the relentless upward trend in private rents is losing momentum, but fresh demand is still comfortably outstripping supply in this area which suggests there is unlikely to any significant relief for tenants. Indeed, feedback from respondents to the survey continue to highlight the challenges in the sector resulting from a whole host of measures introduced in recent years.”
