This month’s RICS (Royal Institute of Chartered Surveyors) housing market survey has reported falling numbers of property buyers and sellers across the UK along with falling confidence from chartered surveyors as to the direction that the UK property market is heading. Are these RICS statistics useful when looking at the Scottish property market and, if so, what are they saying?
Is the RICS Survey Useful When Predicting Scottish House Price Movements?
The RICS monthly survey is a wide-ranging monthly snapshot of the property market, only some of which is particularly useful when it comes to looking at the Scottish property market. The report covers the numbers of buyers and sellers in the marketplace as well as surveyors’ impressions of the property market. However, many of the statistics are based only on the experience of estate agency firms who are also chartered surveyors, registered with the RICS, so the ‘snapshot’ is not entirely representative of estate agencies across the board and particularly not in Scotland where there are few RICS-registered estate agency firms.
The most interesting statistics therefore in the RICS survey are the price movement expectations of the RICS members. Why? Surveyors, in Scotland, have a huge part to play in the movement of the property market.
Surveyors are responsible for putting a valuation on almost every privately-sold property that goes on the market, prior to it going on the market, by virtue of the Home Report (http://www.mov8realestate.com/blog/item/93-what-is-a-home-report-in-the-scottish-property-market?-are-home-reports-a-good-thing?.html)
That Home Report valuation has a knock-on effect on the asking price of the property as it’s difficult to ask for £200,000 for a property that has a Home Report valuation of £150,000. If surveyors are expecting prices to head south and are factoring-that in to their Home Report valuations, the knock-on effect might be that asking, and therefore sale, prices drop.
Where Do Surveyors Say That Property Prices in Scotland are Heading?
This month’s RICS survey reveals that 21% more surveyors in Scotland think that prices are falling than rising.
I am always warning people not to look too much into such widely-drawn statistics. Particularly in this case because Scotland is treated as a ‘region’ of the UK. However, as an indicator of what people within the industry are feeling about the market, it’s useful. That indication is that our fellow-professionals, particularly chartered surveyors, are considerably more downbeat and gloomy about the property market than we currently are. And that will certainly not help any property price recovery in the near future.