A recent survey by the Royal Institution of Chartered Surveyors (RICS) has revealed a notable decline in homebuyer demand across Scotland. Despite this downturn, surveyors remain optimistic, anticipating that both sales and property prices will continue to rise in the coming months.
Decline in Buyer Interest
According to the RICS Residential Market Survey for February, new buyer enquiries in Scotland have plummeted to their lowest level since mid-2024, with a net balance of minus 8% of surveyors reporting a fall in demand. This marks a significant drop from January’s net balance of minus 18%. The decline indicates a cautious sentiment among prospective homebuyers, likely influenced by a combination of economic factors and rising living costs.
Sales and Supply Trends
While buyer interest has waned, the survey indicates that the supply of homes is slightly improving. A net balance of 8% of respondents noted an increase in instructions to sell, although this is a decrease from the 27% recorded in January. On a more positive note, 7% of surveyors reported an increase in newly agreed sales, marking the second consecutive month of positive sentiment in this area. Furthermore, 39% of respondents expect sales to rise over the next three months, suggesting a potential rebound in market activity.
House Prices on the Rise
The survey also highlights that house prices have seen a rise over the past three months, with a net balance of 28% of surveyors confirming this trend. However, the pace of growth has slowed compared to January. Looking ahead, a net balance of 24% of Scottish respondents predict that prices will continue to increase over the next quarter. Marion Currie, a RICS-registered valuer at Galbraith in Dumfries and Galloway, noted an increase in activity as February progressed, stating, “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.”
Broader UK Market Insights
Tarrant Parsons, head of market research and analytics at RICS, also provided insights into the broader UK housing market. He commented on the recent survey’s indication of renewed volatility, suggesting that the geopolitical landscape and rising oil and energy prices have dampened confidence among buyers. The elevated costs of living have increased the likelihood of sustained higher mortgage rates, leading to a more tempered outlook for the near term. While the overall 12-month forecast remains positive, the trajectory will hinge on whether inflationary pressures can be alleviated in the coming months.
Why it Matters
The current state of the housing market in Scotland reflects a complex interplay of consumer sentiment, economic challenges, and external pressures. While a decline in buyer demand may raise concerns, the continued optimism among surveyors regarding sales and prices suggests resilience within the market. This situation underscores the importance of monitoring economic trends and buyer behaviours, as they will significantly shape the future of the housing landscape in Scotland and beyond. As the financial year approaches, both buyers and sellers will be keenly watching how these dynamics evolve.
