Scotland and Northern Ireland’s housing market outperformed the rest of the UK in January, with more buyer enquiries, stronger price growth and higher confidence in the outlook, according to the latest UK residential markets survey by the Royal Institution of Chartered Surveyors.
While nationally, the number of potential new buyer enquiries fell for the seventh consecutive month, Scotland saw the greatest buyer interest, with several respondents suggesting the new land and building’s transaction tax will prompt more first-time buyers to get on the property ladder.
Meanwhile, Northern Ireland’s housing market witnessed the strongest price momentum for the fifth consecutive month, with 47 per cent more respondents reporting increases in prices.
Across England and Wales, house price growth has all but levelled off, with just 2 per cent more surveyors expecting prices to increase over the next three months - the slowest pace since May 2013.
However, recently published data by Halifax showed that last month house prices increased by 2 per cent, their biggest January monthly increase since 2009.
However, the lender warned that it was too early to draw any firm conclusions, as monthly figures in January can be “particularly volatile” due to the lower volumes of activity at this time of year.
Rics’ data also shows that London market conditions continue to deteriorate with prices, buyer enquiries and sales falling.
The latest data shows 49 per cent 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.
Despite a month in which mortgage approvals fell to their one of their lowest levels, the number of agreed sales showed a slight increase in January (up from 19.1 to 19.7) and the 12 month member forecast is more optimistic around activity levels, with 48 per cent of surveyors still expecting sales to increase.
Simon Rubinsohn, chief economist at Rics, said the changes to stamp duty and pending introduction of Scotland’s new land and building’s transaction tax are providing an incentive to first-time buyers.
However he warned there remains a number of challenges to the market, such as ongoing affordability constraints, lack of stock and an air of caution in the run up to the general election.
He said: “Overall, while the Rics lead indicators suggest the level of housebuilding looks set to increase over the course of 2015, the volume of home starts will still fall considerably short of the number of new households being formed, let alone making a dent in the historic shortfall of housing across all tenures.”
peter.walker@ft.com
