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A Lack of Property Stock: Supply Issues in Scotland
Recent trends from analysis of the Scottish property market conclude that a lack of supply of homes on the market is driving up Scottish house prices.
A survey by the Royal Institution of Chartered Surveyors (RICS) found that Scottish house prices are continuing to increase and the number of potential buyers has risen for two consecutive months. However, the number of new properties coming onto the market is falling, a trend which has been ongoing across the country for the past year.
40% of respondents to the survey, taken in October 2016, reported growth, rather than decline, rather than 33% in September of the same year.
These statistics are not just relevant for home owners or sellers, the survey predicted rent rises for tenants in the coming months as demand outstrips supply in this sector too.
Registers of Scotland have concluded similar results. They found that housing market activity increased 8.5% in September year on year and 10.4% month on month. In comparison, annual decreases in sales volumes of 22% were reported in England, 10.4% in Wales and 10.7% in Northern Ireland.
However, the lack of property supply, although it pushes house prices up and keeps the market buoyant, sometimes hides more troubling realities. It is due to a fall in the number of new homes being built that these price rises often occur.
Recent statistics from Homes For Scotland concluded that the volume of new builds being started dropped by 5% to 16,870 in 2016. So, although price increase can be positive for some they suggest problems elsewhere.
Overall, while there has been some concern in the press regarding the potential impact of Brexit and other political upheavals on Scotland, professionals suggest any concerns these have brought have not been long lasting. RICS chief economist, Simon Rubinsohn said: “The dire shortage of available housing across the UK is continuing to push prices upwards, regardless of the uncertainty linked to the ongoing discussions surrounding Brexit.”
It is interesting to note that the West End of Glasgow continues to be a property hotspot and is in fact outperforming the UK as a whole.
Estate agents Savills recently reported that prices are set to increase by almost 19% over the next five years compared to an average of just over 14% across the rest of Scotland and 17% across the UK overall. In real terms, there were almost 4,000 property transactions in Broomhill, Partick, Hillhead, Dowanhill, Hyndland, Jordanhill, Botanics, Kelvinside, Park and Claythorn.
These statistics evidence that those looking to buy in the West End are moving outwards from the traditional areas of Hillhead and Downhill and are equally interested in Jordanhill or Partick. The range of properties that can attract all sorts of buyers from young professionals to families and elderly couples make these areas particularly attractive.
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