Surveyors in Scotland remain optimistic about the housing market, anticipating a rise in house sales over the next three months despite a recent decline in new buyer enquiries. According to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, a net balance of 26% of respondents expect sales to increase in Q3 2024. This positive outlook comes even as the market faces challenges such as reduced supply and fluctuating demand.
Positive Sales Outlook Amid Challenges
Despite a fall in new buyer enquiries, Scottish surveyors are confident about the upcoming months. The RICS survey revealed that a net balance of 26% of respondents expect house sales to rise in the third quarter of 2024. This optimism is a significant increase from the 22% seen in May and 8% in April. Surveyors believe that sensible pricing and a balanced market will drive successful sales, even in the face of reduced buyer interest.
The survey also highlighted that while demand has decreased, the market remains resilient. A net balance of -26% of surveyors reported a drop in new buyer enquiries in June, following five months of positive territory. Factors such as the General Election, the Euros, and the Bank of England’s interest rate decisions have contributed to this slowdown. However, surveyors remain hopeful that the market will recover as these external factors stabilize.
Supply issues have also been a concern, with a net balance of -32% of respondents noting a decrease in new instructions to sell. This is the lowest this balance has been in nearly a year. Despite these challenges, the overall sentiment remains positive, with surveyors expecting the market to bounce back in the coming months. The focus on maintaining sensible prices and addressing supply constraints is seen as key to sustaining this optimism.
Price Expectations and Market Dynamics
Surveyors are also upbeat about house prices, with a net balance of 18% anticipating price increases over the next three months. This follows a positive trend over the past three months, where the headline price balance remained at +29%. The expectation of rising prices is driven by the continued imbalance between supply and demand, which has kept upward pressure on prices.
The survey indicated that the rental market is also experiencing similar dynamics. Demand for rental properties continues to outstrip supply, leading to rising rents. A net balance of 33% of surveyors reported an increase in rental demand, although this is down from 57% in the previous survey. The removal of the rent cap has led to larger rent increases, as landlords seek to reduce the differential between existing and new tenancies.
Surveyors believe that the current market conditions present opportunities for both buyers and sellers. For buyers, the reduced competition may provide a chance to secure properties at more reasonable prices. For sellers, the expectation of rising prices and the continued demand for housing offer a favorable environment for successful transactions. The key to navigating this market will be to stay informed and adapt to the changing dynamics.
Future Prospects and Market Stability
Looking ahead, surveyors are cautiously optimistic about the future of the Scottish housing market. The expectation of rising sales and prices suggests a stable market, despite the current challenges. Surveyors emphasize the importance of maintaining sensible pricing and addressing supply constraints to ensure continued market stability. The focus on these factors will be crucial in sustaining the positive outlook for the coming months.
The survey also highlighted the need for increased supply to meet the ongoing demand. Surveyors are calling for more new instructions to sell, which will help balance the market and support the anticipated rise in sales. The continued collaboration between surveyors, estate agents, and policymakers will be essential in addressing these supply issues and ensuring a healthy housing market.
The Scottish housing market is poised for a positive outlook despite the recent decline in new buyer demand. Surveyors remain confident that sensible pricing and a balanced market will drive successful sales in the coming months. The focus on addressing supply constraints and maintaining market stability will be key to sustaining this optimism and ensuring a healthy housing market for the future.
