The continued lack of properties in the Scottish housing market is causing prices to increase; that is according to a new study of surveyors.

The research, carried out by the Royal Institution of Chartered Surveyors (RICS), revealed that the number of homes for sale in Scotland is falling behind new buyer demand.

Of the surveyors questioned, 31% reported an increase in house prices, while more restrictions on mortgage lending was led to fewer properties being purchased.

Elsewhere, the report found that the average Loan to Value (LTV) ratio in Scotland among first-time buyers fell to 86% in May, but among other types of borrowers, the ration remained more resilient.


Meanwhile, surveyors added they are expecting a more modest growth within the housing market over the next year, with house prices expected to fall from 3.2% to 2.2%. This would be the lowest increase since November last year.

Commenting on the findings, Sarah Spiers, Director RICS Scotland, said: "The lack of supply teamed with continued growth in demand is resulting in higher prices across the country.

"There is some evidence to suggest that the Mortgage Market Review (MMR) has contributed to a modest tightening of the funding market. Despite this, the pattern looks set to continue in the short term, with a net balance of 32% of respondents predicting an increase in sales during the next quarter."

She added that there are plans to resolve the lack of properties entering the housing market.

"The Scottish Housing Commission will publish its report on the Scottish housing market in July. It will make practical recommendations to public policy makers and industry leaders to help improve Scotland's housing market across all tenures. This will include addressing the current lack of supply within the market," she explained.

(JP/IT)