Scotland business

Sharp decline in Scottish housing demand

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Surveyors in Scotland have reported a sharp decline in demand from buyers with a drop in sales in May.

The fall in demand reported by the professional body Rics Scotland in its monthly survey is the steepest since November 2014.

House prices, in contrast, showed a modest rise due to a shortage of properties coming onto the market.

Most surveyors said they expected prices to continue to rise in the coming months.

In the UK as a whole, the Rics UK survey indicated a "short-term drop" in prices. Surveyors in London and East Anglia were most pessimistic about prices over the next quarter.

A net balance of 22% of Scottish surveyors reported a decrease in new properties coming onto the market.

Rics Scotland said supply had now failed to keep up with demand for much of the past three years.

The key findings in Scotland included:

  • A net balance of 13% of surveyors reported a fall in demand
  • A net balance of 8% saw sales fall
  • Prices are expected to rise in the coming months by a net balance of 15% of respondents

Rics Scotland Director Sarah Speirs said: "Across the UK it appears that we are looking at a short-term drop in house prices caused by the uncertainty resulting from the forthcoming EU referendum, coupled with a slowdown following the rush to get into the market ahead of the tax change on the purchase of investment properties.

"In Scotland, prices looks set to remain firm, despite a dip in activity, as demand continues to outpace supply."

She added: "From new supply, to improving the poor condition of the country's existing housing stock and developing plans to bring back into use Scotland's 27,000 long-term empty properties, more needs to be done to address the current imbalance."

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