House prices in Scotland are set to rise seven per cent next year, a new report suggests. According to the Royal Institution of Chartered Surveyors (RICS), the average cost of a home will increase as demand far exceeds the number of available properties on the Scottish property market. Across Scotland, the imbalance between supply and demand is driving up rents, with average monthly payments swelling two per cent on the year. In terms of real estate, house prices have increased by GBP 1,368 since October 2012 - a one per cent rise over the past 12 months.
Excessive demand is forecast to ease throughout the new year, as the number of new build projects is due to increase 11 per cent to 16,400. Although the rise in construction is encouraging, the RICS says it will not be enough to keep pace with projected population growth. RICS Scotland director Sarah Speirs said: "While the number of new homes being built is now on the rise, it still won't be anywhere near enough to meet demand and we expect the problem of insufficient supply of housing stock to be the main driver behind price increases."
Price rises are predicted across the UK, with the biggest average increase of 11 per cent noted in London. Meanwhile, the smallest rise will be seen in Northern Ireland and north-east England. Regional managing director of Your Move, Gordon Fowlis, said: "Sales are substantially better and prices are entering a period of prosperity, fuelled by rising consumer confidence and demand. October is the second consecutive month in which the annual change in prices has been positive, a trend that has not been visible since early 2011."
Experts advise property investors to not confuse rising prices with signs of economic growth. "Putting the improving economic picture to one side, this is largely down to the fact that buyer numbers considerably outweigh the amount of homes on the market," Ms Speirs said.
At first glance it would suggest building more might keep prices inline - but would it? Find out here
- Friday 03 January 2014