House prices in Scotland continued their upward trend in July even though sales fell, albeit at a slower pace than seen previously.
According to the monthly residential market survey released this morning by the Royal Institution of Chartered Surveyors (RICS), a net balance of 30% of surveyors in Scotland reported that house prices increased over the past three months. That marked the eighth consecutive month where that figure was in positive territory.
Looking ahead, Scottish respondents anticipate that prices will continue to increase with a net balance of 14% of surveyors expecting a rise in prices over the next three months. A net balance of 23% anticipate that sales volumes will pick up over that same period.
READ MORE: Average UK house price jumps by more than £2,200 in a month
A net balance of 19% of surveyors in Scotland reported that new instructions to sell increased July, up from -40% in June. Regarding demand, a net balance of 4% reported that new buyer enquiries rose, up from -23% in June and 3% in May.
Although demand and supply edged upwards, a net balance of -4% of Scottish respondents reported that sales fell in the most recent survey. That was up from -16% in June.
RICS chief economist Simon Rubinsohn said the new government’s focus on boosting housing development and the recent quarter-point cut to interest rates by the Bank of England has created a more supportive policy mix for the sector, but "significant challenges" still lie ahead in delivering on ambitions around planning reform.
READ MORE: Average house prices rose £6,800 in Scotland last year
“However, if there is a bit more hope regarding the sales market, the difficulties in the lettings market remain as intense as ever with little prospect of any relief in sight," he added. "Demand is continuing to run ahead of supply with many respondents to the RICS survey noting that landlords are looking to reduce holdings in the face of an increasingly hostile environment for investment in the sector.”
A net balance of 33% of Scottish surveyors reported that demand for rental property rose, while -20% noted that supply fell. Given the gap between supply and demand, RICS said it was "unsurprising" that 50% of respondents expect rental prices to rise during the next three months.
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