Home buyer demand falls but prices still rising
Demand from home buyers fell for the sixth consecutive month in Scotland though prices continue to increase as fewer homes are coming on to the market.
Surveyors are expecting sales to fall further over the next quarter and believe that prices will also fall over the next three months.
The findings emerge in the October RICS Residential Market Survey. In the lettings market tenant demand in Scotland continues to rise at a relatively solid pace with survey participants noting an increase as landlord instructions fell.
Given this mismatch, rents are expected to be driven higher over the near-term – ahead of the government’s introduction of a rent freeze.
Thomas Baird, of Select Surveyors in Glasgow, said: “The property market is clearly facing a period of instability and the upcoming six months are expected to be slow with potential for 12 months of stifled conditions, withdrawn mortgage products and high interest rates.”
Simon Rubinsohn, RICS Chief Economist, commented: “The latest feedback to the RICS survey provides further evidence of buyer caution in the face of the sharp rise in mortgage costs.
“As a result, the volume of activity is likely to slip back over the coming months and realistic pricing is now much more important to complete a sale.
“The settling down in financial markets could provide some relief although it may be premature to assume this will be reflected in a reduction in lending rates anytime soon. However, the employment picture remains critical to the medium-term outlook and for the time being, that remains solid.
“As far as the lettings market is concerned, the imbalance between demand and supply still appears unusually extended leading to rent expectations in the survey remaining at elevated levels and it is difficult to see this changing anytime soon in the current environment. “