House prices in Scotland continue to rise as supply falls

Property prices in Scotland continued to rise in January. Picture: TSPL

Surveyors found that prices increased in January even though demand was not particularly high.

A survey by the Royal Institution of Chartered Surveyors (RICS) in Scotland found the lack of supply was driving prices up, with sales expected to increase over the next three months.

Moves by buy-to-let investors to purchase property before the implementations of the new land and buildings transaction tax - Scotland’s stamp duty replacement - is expected to be a factor in increased prices in the next few months.

Sarah Speirs, director of RICS in Scotland, said: “Again we are seeing a failure of pick-up in new properties coming onto the Scottish market and, although demand was not as strong this month, housing supply is still lagging behind.

“However, with buy-to-let investors rushing to get into the market ahead of the land and buildings transaction tax hike, the near-term pressure on prices is intensifying.

“How the tax changes planned for the buy-to-let sector over the next few years play out remains to be seen, but there are concerns raised in the survey that some existing landlords will look to either gradually scale back on their portfolios or exit the market altogether as the more penal regime begins to bite.

“Against this backdrop, it is perhaps not surprising that the key RICS indicators points to further rent (as well as house price) increases.”