November’s edition of the UK Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) found that the UK housing market has remained flat at a headline level in the run up to Christmas.
Information provided by the survey respondents has suggested that moving forward, activity will continue to be impacted by the continued shortage of new instructions and also by ongoing economic uncertainty.
Scottish Housing Market
In addition to its summary of the UK housing market as a whole, RICS has also provided an interesting insight into the property markets of each of the devolved regions in the UK.
Looking at Scotland, the data from November’s Residential Market Survey shows that the number of sales in the weeks leading up to Christmas has remained flat.
New buyer enquiries were also relatively flat across Scotland, with -4% respondents seeing a fall in new buyer interest and respondents once again suggesting that the lower end of the market is more active.
Pick-up Expected in the New Year
However, on a more positive note, short-term future predictions appear to be more optimistic. Around 29% more respondents to the Scotland survey expect sales to pick up across the coming three months. This is despite new instructions to sell continuing to deteriorate in November, as the supply crisis continues (-22% net balance over the month).
The survey also found that the continued lack of houses coming onto the market is having an ongoing impact on the Scottish house price balance, with 35% more respondents seeing prices rise. Looking forward, the three month price expectations are also optimistic in Scotland as the net balance moves to +24% from +22% in October.
In addition, survey respondents are optimistic that the market is going to gain momentum in the coming months and expect Budget changes to bolster the market in 2018.
Impact of LBTT
“Once again, the most common theme returned from Scotland’s survey respondents involves LBTT and the negative impact it is having on the middle house price bracket and above,” commented Hew Edgar, RICS Policy Manger (Scotland).
“Reviewing the operation of the current LBTT should be a Scottish Government priority as its current framework is limiting market activity from the middle to the prime brackets in Scotland,” he said. “Not necessarily transactions, but instructions to sell and interest in marketed properties, and this is having a detrimental trickle-down effect in other house price brackets.”
“There have been suggestions that the Scottish Government will emulate the UK Government and scrap LBTT for first time buyers,” he added. “Whilst this may stimulate activity at a time when the market is subdued, it does not tackle the overarching problem of a lack of suitable accommodation across the housing tenures. Similarly, the current LBTT regime is already aimed at assisting first time buyers and those operating in the lower end of the house buying market. Whilst further support could enhance affordability, it could also increase the number of participants operating in the lower end of the market which could serve to increase house prices.”
For expert legal advice on buying or selling property across Scotland then contact our specialist property and conveyancing lawyers today.