Demand for property in Scotland continues to outstrip supply, despite first-time buyers struggling to borrow as much following the introduction of new mortgage lending rules, a report has revealed.
The monthly study from the Royal Institute of Chartered Surveyors (RICS) Scotland found a net balance of 32 per cent of chartered surveyors reported growth in new-buyer inquiries.
But RICS said average loan-to-value ratios among first-time buyers had dropped for the second consecutive month in Scotland to 85 per cent, down from 88 per cent in April, due to tighter UK-wide regulations in the loans market.
It also said that property prices had continued to rise with 57 per cent of surveyors questioned reporting an increase in prices in June.
Meanwhile, separate figures compiled by Solicitors’ Property Centres in the Lothians and Tayside found that demand for homes has spiralled over the past six months. Tayside Solicitors Property Centre (TSPC) sales statistics for the first six months of the year reveal that sales volumes have leapt 29 per cent year on year, while the Edinburgh Solicitors Property Centre (ESPC) said that sales between April and June this year increased by 32 per cent compared with the same period last year.
“The turnaround in the property market in this area and across Scotland has been remarkable,” said spokeswoman Lynne Hill.
“Average prices are up across the board, ranging from flats to villas, and we are seeing more properties achieving and exceeding valuation.”
The EPSC said the rise in buyer activity has made market conditions more favourable for sellers.
In the three months to June, 58 per cent of homes sold across Edinburgh, the Lothians and Fife achieved a selling price that was equal to or in excess of their original home report valuation.
However, David Marshall from ESPC said that despite high demand, sales volumes were still lower than during the pre-recession housing boom.
“The number of sales we’re seeing is still around 25 per cent lower than at the peak of the market and the rate of house-price inflation in most areas is moderate when compared to the rises in some areas south of the Border,” he said.
The RICS Scotland report revealed that around 40 per cent of surveyors expect prices to continue to rise.
Sarah Speirs, director of RICS Scotland, said: “We continue to see demand exceeding supply and this has a direct impact on prices.
“While we do expect this to level out, the lack of supply is driving the Scottish market and one which will be addressed within the Scottish Housing Commission’s recommendations published this month.”