26 Nov 2014
Sean MacMillan, Senior Solicitor, analyses the current property market trends.
Demand for houses in Scotland was particularly high during the month of October, pointing to a positive end to the year for the property market.
Figures from a variety of sources have shown increased demand for the month, at a time when the rest of the UK markets have dipped. In its latest residential market survey, the Royal Institution of Chartered Surveyors (RICS) illustrated a steep increase of 81% more surveyors reported a rise in enquiries from new buyers. Demand in the rest of the UK dropped to a net balance of -18%.
Encouragingly, views on sales activity were equally positive with more than half of surveyors surveyed predicting a rise in sales over the next three months. Interestingly, 39% of respondents reported an increase in new instructions during the month of October which RICS state is the largest increase this year. In an overwhelmingly positive report for the Scottish market, RICS also commented that demand for property is currently outstripping supply, as well as highlighting increasing activity in the lettings market.
So what are the reasons for the noticeable surge in activity in what can sometimes be a quieter time of year? Sarah Spiers, Director of RICS Scotland sums up the two main factors as follows:
“Post referendum confidence in the market has seen a surge in activity, both in demand for property and an increase in homes coming onto the market. Last month’s announcement on land and buildings transaction tax may also have had an impact on the higher end of the market.”
Further evidence that the referendum had a significant effect on the market can be seen when analysing the September RICS review, which reported a fall in the number of new homes coming to the market and demand dropping to the lowest level for 20 months. It should be noted however that throughout this period, average house prices in Scotland have never faltered and have in fact increased noticeably on prices this time last year. This is illustrated in the latest figures released by Registers of Scotland, the government body responsible for maintaining registers of land and property for the country. Their statistical report for the quarter comprising July to September showed that the average price of a residential property increased by 5.2% compared to the same quarter in 2013. The average price of a property in Scotland is now £170,190 which, remarkably, is the highest recorded average since Registers of Scotland began recording quarterly statistics in 2003.
Given the figures referred to above, it is clear that a strong feeling of positivity pervades the property market in Scotland, as 2014 draws to a close. With increased activity expected at different ends of the house buying spectrum before and after the introduction of the Land and Buildings Transaction Tax in April, there is no reason why this market confidence cannot extend into the new year.