Scottish Housing Demand Plummets. Surveyors Bet on Price Rises Anyway.

Demand for Scottish homes has collapsed to its lowest point in eight months, according to February's figures from the Royal Institution of Chartered Surveyors. Yet surveyors across the country remain stubbornly optimistic about both sales volumes and prices through spring. The disconnect is stark, and potentially expensive for buyers banking on a softer market ahead.

RICS data shows new buyer enquiries in Scotland fell to a net balance of minus 8% in February, a dramatic reversal from January's positive net balance of 18%. That's a 26-percentage-point swing in a single month. Despite this slump in demand, 39% of surveyed professionals expect sales to rise over the next three months, whilst 24% anticipate prices will continue climbing.

The question facing potential buyers is simple: are surveyors reading the tea leaves correctly, or are they missing something fundamental about Scottish market dynamics?

Enjoying this article?

Get stories like this in your inbox every week.

Join the Community

Supply constraints tell a different story

The optimism amongst property professionals appears rooted in supply-side arithmetic rather than demand trends. Whilst buyer enquiries tumbled, new instructions to sell increased by a net balance of just 8% in February, down sharply from 27% in January. That modest uptick in properties coming to market may prove insufficient even for the reduced pool of active buyers.

Basic economics suggests that when supply fails to keep pace with demand, prices rise. But the current Scottish market presents a more complex picture.

Demand is falling, supply is barely growing, yet the expectation of price increases persists. The implication: surveyors believe the supply shortage remains the dominant force, capable of pushing prices higher even as enthusiasm from buyers wanes.

The figures on agreed sales offer a clue to their reasoning. A net balance of 7% of surveyors reported rising agreed sales in February, marking the second consecutive positive month. Properties are still shifting, in other words, just with fewer people initially expressing interest. Those who do enter the market appear more committed to completing transactions.

The attribution problem

RICS pins the February deterioration on what it calls 'the geopolitical backdrop' and rising oil and energy prices, which have reportedly increased expectations that mortgage rates will stay elevated for longer. Tarrant Parsons, RICS's head of market research and analytics, points to 'renewed volatility' stemming from these external pressures.

But this explanation feels incomplete for the Scottish market specifically. Scotland operates under different property transaction tax rules than the rest of the UK, with Land and Buildings Transaction Tax thresholds and rates set by Holyrood rather than Westminster. The country's housing stock, geographic distribution, and local economic factors all create distinct dynamics that UK-wide inflationary concerns don't fully capture.

What's particularly striking about the RICS commentary is the single optimistic voice included in their report: Marion Currie, a registered valuer in Dumfries and Galloway, who notes 'activity has increased' and describes 'an encouraging outlook'. Her assessment sits awkwardly alongside data showing the steepest monthly drop in buyer enquiries in recent memory. Regional variations certainly exist, but one surveyor's optimism in a rural market hardly explains the national picture.

The sitting tenant's dilemma

For prospective buyers weighing whether to enter the market or wait for conditions to improve, the data presents an uncomfortable choice. Buyer enquiries are falling, which typically signals softening prices ahead. Yet the professionals who spend their days valuing properties and negotiating sales believe prices will keep climbing.

The risk for fence-sitters is clear: if supply constraints prove more powerful than demand weakness, waiting could mean paying more later for the same property.

Conversely, if the collapse in enquiries reflects genuine deterioration in buyer confidence and financial capacity, rushing in now could mean overpaying at the tail end of a price cycle.

The 12-month outlook from surveyors remains positive overall, according to RICS, though maintaining that trajectory depends on inflationary pressures easing in coming months. That's a significant conditional. Energy prices remain volatile, geopolitical tensions show no signs of abating, and the Bank of England has given little indication it's prepared to cut rates aggressively.

Scottish buyers face a market characterised by contradictory signals and uncertain fundamentals. Surveyors' expectations of rising prices may prove prescient if supply stays tight. But the sharp monthly swing in buyer demand suggests something has shifted in how people view the market's near-term prospects. Whether that shift proves temporary or marks the start of a deeper recalibration will likely become apparent by summer, when traditional spring activity should provide clearer signals about underlying market health. Meanwhile, some analysts point to buyers returning as mortgage rates fall, though whether this trend extends to Scotland remains to be seen.

More articles by Ross Williams