Brexit remains drag on Scottish housing market, research warns

A prolonged lack of momentum in the Scottish housing market is set to continue, according to research.

Inquiries from new buyers in Scotland fell in March, with an increase of 9% of respondents to the Royal Institution of Chartered Surveyors (Rics) study seeing a fall rather than a rise in buyer demand.

The UK’s planned withdrawal from the EU has been blamed for the stagnation.

Simon Rubinsohn, Rics chief economist, said: “Brexit remains a major drag on activity in the market with anecdotal evidence pointing to potential buyers being reluctant to commit in the face of the heightened sense of uncertainty.

“Whether any deal provides the shift in mood music envisaged by many respondents to the survey remains to be seen but as things stand, there is little encouragement to be drawn from key Rics-lead indicators.

“We expect transactions to decline on this basis.

“Arguably more significant still are the signs that developers are continuing to adopt a more cautious stance with the trend in new residential starts now flat-lining.

“Against this backdrop, there is little possibility of delivering the uplift in supply necessary to address the ongoing housing crisis.”

The Rics UK Residential Market Survey shows near-term sales expectations for Scotland are also negative.

A net balance of 11% more chartered surveyors expect a decline in sales over the next three months.

The ongoing fall in new property coming on to the Scottish market continues, having become progressively weaker in each of the past four surveys.

It has dropped from the net balance of -15% in December 2018, to -24% in March 2019.

Demand from potential buyers has consistently outpaced new instructions across Scotland for several years now, according to surveyors.