RICS survey

Homes market remains slow as rate rises loom

Homes for sale boards
The market is expected to flatten in the coming months (pic: Terry Murden)

Activity in Scotland’s housing market continued to slow through May, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.

Indicators suggest that expectations about further interest rate rises may see more downward pressure on the market in the months ahead.

Weak activity appears to be weighing on surveyors’ expectations. Sales are expected to be broadly flat over the next quarter. For now though, it seems that prices are holding up., and despite the weakening demand and outlook, surveyors in Scotland are more optimistic compared to the UK average.

Thomas Baird of Select Surveyors in Glasgow said: “Whilst there is a clear slowdown in the Scottish residential market, we have seen some uplift in the number of home report instructions and perhaps signs of a bounce back.

Ian Morton of Bradburne & Co in St Andrews added: “The market has stagnated earlier than the usual summer holiday slow down and sale prices are closer to Home Report figures.”

Commenting on the UK picture as a whole, RICS senior economist, Tarrant Parsons, said: “The latest RICS UK Residential Survey feedback indicates a modest recovery in the sales market activity during May, with generally less negativity compared to the end of 2022. 

“However, it seems storm clouds are gathered, with the UK’s stubbornly high inflation likely undermining the recent improvement in activity by prompting the Bank of England to take further action through interest rate rises, leading to higher mortgage rates and ultimately reducing affordability and buyer demand.

“The banking sector appears to expect this with many banks and building societies already introducing products with higher interest rates.”

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