Lack of supply boosting house prices in Scotland

House prices in Scotland are continuing to rise thanks to lack of supply, according to new research.

A residential market survey from the Royal Institute of Chartered Surveyors Scotland (RICS) found demand north of the border in March was flat.

More respondents said house prices were continuing to increase and, in the short term, were expected to continue going up.

A shortage of homes coming into the domestic market is also continuing – a trend which goes back nearly two years to May 2016.

The March 2018 RICS UK Residential Market Survey found that in Scotland the number of new properties coming on to the market has been falling for a year with a +10% net balance of respondents reporting new sales instructions falling in March.

Survey respondents said the continued shortage of stock is driving up prices, with a +30% net balance noting an increase in headline prices.

The same percentage expected continued growth in this area in the next three months.

Nearly a third (30%) expect sales in Scotland to grow over the same period and in the medium term a net balance of +52% of respondents expect an increase in sales in the next year.

Simon Rubinsohn, RICS chief economist, said: “The latest RICS results provide little encouragement that the drop in housing market activity is likely to be reversed anytime soon.

“Apart from the implications this has for the market itself, it also has the potential to impact the wider economy contributing to a softer trend in household spending.”