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Prices and sales in Scotland expected to keep rising in first quarter of 2016

The latest monthly survey from the Royal Institution of Chartered Surveyors (RICS) in Scotland said rising demand from would be buyers and a slight increase in the number of properties coming onto the market led to a rise in newly agreed sales last month.

Throughout 2015, surveyors reported almost continual growth in prices and this went on into December, with a net balance of 29 per cent more respondents reporting a rise in house prices.

A net balance of 35% of Scottish respondents forecast a rise in transactions in the January to March period, with 24% of surveyors also expecting average prices to increase in this quarter.

‘The Scottish housing market has experienced an unusually buoyant December, with growth in transactions, demand and a small increase in properties coming onto the market,’ said Sarah Speirs, director of RICS Scotland .

‘Despite this growth in new instructions, the chronic shortage of housing supply in Scotland continues to result in rising house prices and rents across the country. To remedy the shortage, Scottish Government policy is, and for a considerable amount of time has been, aimed at supporting demand and, more crucially, the new build market and home ownership,’ she added.

RICS has launched its manifesto Shaping Scotland’s Housing Future which aims to inform political parties of the role property plays in driving Scotland’s economic growth ahead of the parliamentary elections in May.

It calls on policy makers to recognise the scale of the housing crisis, and elevate housing to the top of their political priorities as well as increasing the supply of housing and taking action to maintain and renew Scotland’s existing housing stock.

The report also recommends ta review of tax and incentives around all properties and the creation of a Housing Land Agency, which would work with local authorities and developers identifying land, primarily in areas of market failure, and installing any necessary infrastructure for sites.

‘Adequate housing supply is vital to economic growth and the much coveted stabilising of house prices and rents. It is estimated that between 25,000 and 35,000 homes need to be built, per year, to meet demand adequately. This target covers all tenures, not just affordable housing,’ the report says.

‘An independent agency would work with local authorities and developers by identifying new development sites and installing any necessary infrastructure for sites, primarily in areas of market failure,’ it adds.

RICS envisages that land acquired by the agency, through reformed Compulsory Purchase Order (CPO) powers, could be sold to less established participants, such as small and medium enterprises (SMEs), private rented sector (PRS) investors, self-build and co-ownership and thus widening participation and assisting a vibrant SME sector and the wider economy.

It also points out that the PRS market in Scotland has been dominated by small scale investments from individual landlords who own one to three properties. ‘This has led to a fragmented PRS system that lacks consistency and stability and unfavourable conditions for large scale institutional investment,’ the report says.

‘RICS wants institutional investors to be encouraged to build and let new developments, not take on the landlord duties of current PRS stock. RICS suggests initiatives, such as Rental Income Guarantee Scheme (RIGS), Built to Rent Fund, or alternate planning arrangements for purpose built PRS developments are explored,’ it adds.

It also calls for the regulation of estate agents to bring them in line with other professionals who work the market such as chartered surveyors and solicitors. ‘Regulation will not only increase estate agents’ independence and transparency, it will benefit the consumer by building trust, and raise ethical and practice standards in the sector. These enhancements are essential for a fully functional buying and selling process,’ the report explains.