In the recent RICS UK Residential Market Survey, Scotland and Northern Ireland exceeded all expectations to be the UK’s highest performer of the housing market in January. The study unveiled supply and demand was varied across UK and London’s house prices had declined.
In Scotland and Northern Ireland the housing market outperformed the rest of the UK in January with more buyer enquiries, stronger price growth and higher confidence in the outlook. Although the number of potential new buyer enquiries fell again for the seventh consecutive month, Scotland saw the greatest buyer interest with many respondents stating the shift in land and buildings transaction tax, may prompt buyers to get on the property ladder. Northern Ireland saw 47% more respondents reporting increases in prices, the housing market saw the ‘strongest price momentum’ for the fifth consecutive month.
Further to this, London house prices declined for the fifth month in a row and are forecasted to continue to drop. London was the only region in the UK to see a dip in house prices last month. The result of the UK’s housing market illustrated a very mixed picture. National results gained by the study showed a continued cooling market and price growth that has levelled off with just 2% more surveyors suggesting that prices will increase over the next few months. Along with this, London market conditions are set to continue their downward spiral as prices, buyer enquiries and sales are expected to fall. The analysis states that 49% more respondents saw prices in the capital decline and the short-term confidence outlook is negative, despite the longer terms sales outlook being more upbeat.
RICS’s analysis found the results were affected by the changes to Stamp Duty and pending introduction of Land and Buildings Transaction Tax (LBTT) in Scotland are acting as an incentive to first time buyers. However, challenges of course, remain on the market. These include; ongoing affordability constraints, lack of stock and the general election discouraging people’s interest in the housing market altogether. Overall, RICS suggest that the level of housebuilding will increase over 2015, the level of home starts will fall sort of the number of new households being formed, thus making a dent in the shortfall of housing across all tenures.