Demand from new property buyers ‘flat’ in September, according to report

INTEREST from would-be property buyers weakened slightly last month, with a number of factors holding back activity in the market, a new report has found.

The Royal Institution of Chartered Surveyors’ (Rics) reported the combination of affordability constraints, a lack of stock, economic uncertainty and interest rate rises kept demand from new buyers “flat” in Scotland in September.

Several respondents to Rics’ residential market survey across the UK said uncertainty over Brexit was causing concern and stalling the market.

Meanwhile, the report found the volume of new sales instructions remained in negative territory last month, with a net balance of -21% of respondents reporting a decline in new properties coming onto the Scottish market.

As a consequence, house prices north of the border continued to rise during September and a net balance of 19% more chartered surveyors expect prices to keep increasing over the next three months.

Sales predictions were found to remain positive in the immediate future, with 14% more surveyors expecting sales to increase as we head towards the end of the year.

In Scotland’s lettings market, tenant demand remained “firm”, the report found.

Across the UK, rents were projected to increase by just over 2% in a year.

Eric Curran, of DM Hall in Glasgow, told the survey: “Many sections of the property market still suffer from a shortage of stock, resulting in higher prices being achieved.”

Marion Currie, of Galbraith in Dumfries and Galloway, told Rics: “Seasonal slow down now well underway in terms of new instructions, but buyers in good positions are still coming forward.”

Commenting on the report’s findings across the UK, RICS chief economist Simon Rubinsohn said: “There are a number of themes running through the comments of respondents this month but uncertainty relating to Brexit negotiations is at the very top of the list followed by references to the confidential remarks made by the Bank of England Governor to the cabinet.

“All of this is not surprisingly taking its toll on the sales market with the key activity indicator in the survey flat or slightly negative in all parts of the country apart from Northern Ireland and Wales.”