Property activity at lowest level in ten years

Fewer homes on the market due to Brexit fears means Scottish sale prices are increasing. Picture: John Devlin

A lack of properties going up for sale, fuelled by Brexit uncertainties, has created the lowest levels of activity in the Scottish housing market in more than a decade.

The Royal Institute of Chartered Surveyors (RICS) Scotland report said new instructions north of the Border suffered the poorest reading since March 2009. However, prices continued to rise, with Scotland one of only two UK regions to report an increase.

This comes as a separate report from Halifax showed that the average UK house price now stands at £236,619, following a 1.1 per cent monthly rise in April.

New buyer interest across Scotland has deteriorated so far in 2019, with a net balance of -26 per cent of respondents reporting a decline in demand. On the back of this, the survey’s indicator on newly agreed sales turned negative, with a net balance of -19 per cent more chartered surveyors reporting a drop in transactions during April.

Chartered surveyor Peter Drennan, spokesman for Allied Surveyors Scotland, said: “Quieter, but limited supply meaning prices holding up, especially at mid-market levels. The underlying shortage [of properties] continues.”

Scottish house prices remained firm in April, with a net balance of 28 per cent more respondents reporting an increase. However, the regional breakdown across the UK shows prices under pressure in London and the south east, while the south west has now consistently fallen for the past six months.

Only Northern Ireland and Scotland continue to buck the trend, with respondents reporting a further rise in prices.

Simon Rubinsohn, RICS chief economist, said: “Across the UK, although there are signs of greater realism on pricing from vendors, there is little conviction in the feedback from respondents to the survey that activity in the housing market will pick-up anytime soon.”

In the Scottish lettings market, tenant demand continues to climb while landlord instructions continue to dwindle, extending a run of successive quarterly declines dating back to the beginning of 2016.

Rents are projected to rise to by around 2 per cent at the UK level over the coming 12 months, with growth accelerating to average 3 per cent a year over the next five years.

Russell Galley, managing director at Halifax, said: “The index has seen a weaker pace of growth over the last three years, which is consistent with the easing of transactions volumes and housing market activity reflected in RICS, Bank of England and HMRC figures.”