More interest – but number of houses for sale slumps

Published on Monday 8 June 2009 21:43

HOUSE buyers continue to return to the Scottish market but a slump in the number of homes being put up for sale could inflate prices, figures out today suggest.

Interest from potential home buyers in Scotland rose for the seventh consecutive month in May, according to the Royal Institution of Chartered Surveyors.

RICS figures show that 70 per cent of Scottish surveyors reported a rise in inquiries last month, compared to 27 per cent in April and 7 per cent in March.

In the same month last year, 59 per cent more surveyors reported a drop in interest than saw a rise.

But new instructions from sellers who want to put their home on the market fell sharply over the month, 35 per cent more surveyors reporting a fall in new seller instructions than a rise.

In April, 40 per cent more had logged a rise than reported a fall in instructions. A slowdown in new supply, coupled with increased buyer interest, could provide "some support for house prices", according to the RICS report.

Just one in ten surveyors said prices had fallen over the past three months, while 10 per cent said they had increased and the remainder reported that they had remained stable.

And the proportion of Scottish surveyors reporting falling rather than rising house prices narrowed in May.

Sarah Speirs of RICS Scotland commented: "There seems to be a dim light visible at the end of the tunnel for Scotland's housing market.

"However, the inquiries are not all translating into sales yet because buyers still have obstacles to overcome including risk of redundancy and lack of finance especially for first-time buyers."

Her observation was borne out by a drop last month in the number of Scottish surveyors expecting sales to increase. Sales expectations were lower among surveyors in Scotland than elsewhere in the UK.

Grant Robertson, of Allied Surveyors in Glasgow, said: "Whilst some recent sales give rise to cautious optimism the volume is so low as to be almost disregarded against continuing price falls from properties marketed for over six months."