Scottish housing market still resilient, but cracks appearing

Published on Tuesday 15 July 2008 21:22

SCOTLAND'S housing market suffered a further slump last month but continues to fare better than the market in the rest of the UK, according to a report published yesterday.

The Royal Institution of Chartered Surveyors (Rics) in Scotland revealed that the number of its members reporting a fall in house prices increased in June.

It said 59 per cent of surveyors reported that house prices remained unchanged, while 4 per cent said they had risen compared with the previous month.

However, 37 per cent reported falling prices, up from 26 per cent in May and a big increase on the 3 per cent figure recorded in January. In contrast, 78 per cent of surveyors in London reported that prices had dropped, as did 90 per cent in south-east England and 93 per cent in the West Midlands.

"These figures show that it's currently not all doom and gloom in the Scottish housing market, especially compared with the rest of the UK," said Graeme Hartley, director of Rics Scotland.

The new figures revealed a rise in buyer inquiries in June, with surveyors reporting that buy-to-let investors and cash buyers are looking to take advantage of lower prices.

Instructions to sell were down on the previous month.

Alasdair Seaton, a partner in DM Hall Chartered Surveyors in Dunfermline, said that this reflected a lack of confidence in the market. He added: "Supply is outstripping demand and sales are one-third of last year's levels. There are few viewers and few first-time buyers."

But the higher end of the market is holding up well, according to Lindsay Duguid of McNeil Maguire & McCreath in Edinburgh. But he added: "The feeling amongst professionals is that the market will harden over the next few months with fewer purchases and sales."