However, expectations for the housing market next year improved, assisted by an easing in mortgage rates during recent weeks.

Taking a look at demand through November, a net balance of -17% of respondents in Scotland noted a fall in ne buyer enquiries. Although remaining in negative territory, this is up from -20% and -35% in the two prior surveys.

Regarding supply, surveyors report that new instructions fell at the fastest rate since summer, with a net balance of -25% of Scottish respondents noting a fall in new instructions
to sell.

With both demand and supply on downward trajectories sales were also said to have declined in November. A net balance of -42% of respondents in Scotland reported a fall. Scottish respondents also noted a fall in prices over the past three months, with the headline price balance now at -7% of respondents. This is compared to the UK average of -43%.

Regarding the outlook, a net balance of -6% of Scottish surveyors expect a fall in prices over the next quarter, and sales are anticipated to fall flat over the same period.

However, 12-month expectations for both prices and sales improved. A net balance of +22% of respondents in Scotland expects prices to be higher in a year’s time and a net balance of +10% expects the number of sales to be higher in 12 months. Comments from surveyors point to easing mortgage rates as a factor in the improved outlook.

Looking at the lettings market, the imbalance between demand and supply eased through November. Surveyors report that demand for lettings was reported to have fallen flat, down from 13% in October and 29% in September. Looking at landlord instructions, a net balance of -13% noted a fall in supply, although in negative territory, this is up from the lowest figure of -80% which was seen in June 2023.

With this supply and demand dynamic, a net balance of 38% of respondents in Scotland expect rents to increase in the three months ahead, just below the UK average figure of 42%.

Commenting on the sales market, Greg Davidson MRICS, of Graham + Sibbald in Perth, said: “The base rate looks reasonably stable and lenders are starting to compete for business with competitive mortgage rates. This combined with more reasonable inflation figures seems to have created some reassurance which should create a more positive market into 2024.”

Discussing the lettings market, Grant Robertson FRICS of Allied Surveyors Scotland Plc in Glasgow added: “Rental demand has fallen but that is always seen around this time and there is some softening on rent levels. With more legislation pending in 2024, uncertainty remains in the market for new entrants.”

Commenting on the UK picture, RICS chief economist, Simon Rubinsohn, addd: “The latest RICS Residential Market Survey provides further evidence that sentiment is a little less negative than previously was the case with, critically, the new buyers enquiries indicator finally beginning to stabilise. This is being aided by increased confidence that the interest rate cycle has peaked which is reflected in somewhat more competitive mortgage products coming to the market.

“However, with the cost of money likely to remain elevated for some time to come and the economic outlook still downbeat, it is not surprising that the overall tone to the anecdotal remarks from survey respondents is still quite cautious.”