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The latest insights from the Royal Institution of Chartered Surveyors (RICS) reveal a troubling dip in homebuyer demand across Scotland for February. However, despite this decline, surveyors maintain an optimistic outlook for both sales and property prices in the upcoming months.
Declining Buyer Interest
According to the RICS Residential Market Survey, a net balance of minus 8% of surveyors reported a drop in new buyer enquiries during February, marking the lowest level since mid-2024. This decline follows a more positive net balance of 18% in January, indicating a significant shift in buyer activity.
The survey highlights that the number of new instructions to sell properties also experienced a downturn, with only 8% of surveyors reporting an increase in listings, down from 27% the previous month. This reduction in both buyer interest and seller instructions suggests a market in flux.
Positive Sales Trends
Despite the decrease in enquiries, there is a silver lining. A net balance of 7% of surveyors noted an uptick in newly agreed sales last month, maintaining a positive trend for the second consecutive month. Furthermore, an encouraging 39% of respondents expect sales to rise over the next three months, indicating a potential rebound in market activity.
Marion Currie, a RICS-registered valuer from Galbraith in Dumfries and Galloway, commented on the situation, stating, “Activity has increased as February has unfolded. Agreed sales are starting to gain momentum, and a good supply of fresh stock is in the pipeline. An encouraging outlook as we head towards a new financial year.”
House Prices on the Rise
The survey also revealed that 28% of respondents reported an increase in house prices over the past three months, although the rate of growth has slowed compared to January. Looking ahead, 24% of Scottish surveyors anticipate that prices will continue to rise in the coming quarter.
Tarrant Parsons, head of market research and analytics at RICS, provided further context, saying, “February’s survey highlights renewed volatility in the market. While activity indicators at the start of the year suggested a tentative improvement, the deterioration in the geopolitical backdrop has clearly weighed on confidence. The recent rise in oil and energy prices has also increased the likelihood that mortgage rates will remain higher for longer, leading to softened near-term expectations.”
Broader UK Market Context
The findings from Scotland reflect broader trends observed across the UK housing market. The combination of geopolitical tensions and rising energy costs is creating a complex landscape for prospective buyers and sellers alike. While many remain hopeful for a recovery, the market’s short-term trajectory will hinge significantly on inflationary pressures easing in the upcoming months.
Why it Matters
Understanding these trends is crucial for homeowners and potential buyers as they navigate a shifting property landscape. The decline in buyer demand juxtaposed with expectations of rising prices presents a unique dilemma: while the market may be cooling in certain areas, the potential for increasing property values could incentivise current homeowners to remain in the market. As economic conditions evolve, staying informed will be vital for making sound property decisions.
