House prices continue to climb despite sales falling – survey

The Royal Institution of Chartered Surveyors said its survey of property professionals in Scotland showed the number of houses being sold was falling.

Property professionals saw fewer new inquiries from house hunters in June (Gareth Fuller/PA) (PA Wire)

Despite the number of houses being sold falling in Scotland last month, property prices continued their upward march, surveyors have said.

Fewer potential buyers were seen in the market during June than in May and fewer sales were going through, according to the latest Royal Institution of Chartered Surveyors (Rics) residential market survey.

Richard Clowes, of DM Hall, said: “Ongoing economic issues such as inflation and the cost-of-living crisis may be starting to have an impact generally but lack of supply in the marketplace means buyers are in most cases, not all, paying well over home report value.”

A net balance of minus 40% of property professionals said the number of new buyers was down, while a balance of minus 22% said sales fell.

The inevitable reaction to the squeeze on household budgets and rise in mortgage rates has arrived

Grant Robertson, Allied Surveyors Scotland

The net balance is the proportion of respondents reporting a rise minus those reporting a fall.

Grant Robertson, of Allied Surveyors Scotland in Glasgow, said that the “inevitable reaction to the squeeze on household budgets and rise in mortgage rates has arrived”.

“Viewer numbers are reducing and sales are taking longer, but remember a two-week sale time is still incredibly quick and there is no evidence yet of any impact on house prices,” he said.

Short-term expectations for the market north of the border were also muted, and estate agents said they expected prices to edge lower and for sales to pick up only slightly.

But, Rics said, with fewer properties coming on to the market, which is exacerbating an existing lack of supply, prices have continued to edge upwards, albeit at a slower rate.

In terms of supply, the net balance for instructions to sell was minus 9% of respondents, indicating that fewer properties were coming on to the market than last month.

In relation to prices, the net balance was plus 64 in the June report, down from plus 73 in May. This suggests that prices are still rising but less firmly so.

Thomas Baird, of Select Surveyors, said: “The summer slowdown over the holiday period has started earlier than normal and the lack of new stock is driving sales and lettings figures are increasing steadily.”