Analysis: Useful gauge of complex and volatile market’s highs and lows

AS CHARTERED surveyors and contributors to the monthly RICS UK Housing Market Survey for more than ten years, we are acutely conscious of the survey’s usefulness as a real-time indicator of the health of the housing market.

Helpfully, it measures inquiries and new instructions as a barometer of “front-line” market activity, as well as the number of sales and price levels which other national indices record – most notably those of the major lenders, and from the Registers of Scotland.

Arguably, it is therefore more holistic and helps to predict future trends more pragmatically than analysing transactional data – which is to an extent out of date by the time it is published.

Its principal limitation, however, lies in its sample size. With no more than 25 to 30 discretionary – rather than obligatory – respondents, the RICS survey cannot hope to capture all trends within a complex, volatile market, which has seen a profound polarisation since the “crash” of May 2008.

Four years into a market of low volume and subdued prices, broadly at 40 per cent and 85 per cent of 2007 levels respectively, the resilience of certain property asset classes is clear. Our own city centre offices in Edinburgh and Glasgow have seen the volume of sales at broadly two-thirds of those taking place at the market’s height, and a highly encouraging 25 per cent above those of 2011.

Critically, and helping to inject welcome confidence into our market place at the middle and upper end of the scale, prices remain predictable and surprisingly robust.

All bar three of the 55 sales recorded by our Edinburgh office since 1 January have been in the range of 90 to 95 per cent of their independent home report valuation.

More than four-fifths of these sales have been to Edinburgh-based buyers, confounding the myth that southern and overseas money is fuelling this modest but palpable recovery.

• Anthony Perriam is director and head of residential sales at Rettie & Co.