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The National (Scotland)

Gradual decline in house prices predicted amid cost of living crisis

Scottish house prices are still on the rise despite predictions

A GRADUAL slowdown in the housing market in Scotland is likely as the cost-of-living crisis bites, a report has warned.

House prices in Scotland continue to edge upwards but indicators are softening slightly, according to the Royal Institution of Chartered Surveyors’ (Rics) latest survey.

Around 65% of respondents said house prices rose in April, with new buyer inquiries increasing 6% and agreed sales up 4%. While surveyors in Scotland expect similar trends in the short-term, they said there could be uncertainty over the next year as rising interest rates play on buyers’ minds. The survey found 27% of respondents expect prices to increase over the next three months, compared to 38% of respondents in March.

Rics also found that fewer properties are coming on to the market, with results from April’s survey showing there were 5% fewer homes going on sale than in March.

David Cruickshank, of DM Hall in Elgin, said: “The market is still extremely buoyant, despite rising prices of goods and energy. This is driven locally by pent-up demand and insufficient supply. A gradual slowdown is likely over the next year as the increased cost of living finally affects the residential market.”

John Brown, of John Brown and Company in Edinburgh, said: “There is buoyancy in the market but the impact of interest rate rises and uncertainty generally is coming into buyers’ thinking.”

Rics economist Tarrant Parsons said: “There is little evidence at this stage of house price inflation losing much momentum, while expectations for the coming 12 months have only moderated slightly from recent highs.”