Estate agents do not believe a housing market crash will occur in the coming years despite forecasts of a recession for the UK and the ongoing cost of living crisis.  

A report by experts at Rettie has found that businesses boomed after the end of the pandemic lockdown in 2020 and will likely sustain house prices even if interest rates rise and make getting a mortgage harder and more expensive.  

It predicts that the average price of property in Scotland could rise by around two per cent each year to a peak of £250,000 by 2027.  

Rettie’s Scottish Residential Sales Market Briefing said that crashes are usually preceded by booms in the market — but the slowdown during the pandemic meant this was not the case at present.  

Demand for housing continues to outstrip supply, meaning the market is likely to be insulated against the forces buffeting the wider economy.  

A lack of housebuilding in recent years has contributed to the situation, with the average with the average completion rate for new builds running at just over 17,000 units per annum. 

A report by experts at Rettie has found that businesses boomed after the end of the pandemic

The report said that a recent study by Homes for Scotland has suggested completions in Scotland need to rise to 25,000 per annum to meet demand. 

Average prices in Scotland grew by 5% during the first half of 2022, while the highest growth in sales since 2019 were found in Aberdeenshire (up 38%), the Scottish Borders (up 24%) and Perth & Kinross (up 22%)  

Average prices have grown fastest in Inverclyde (up 44%), the Scottish Borders (up 39%) and Argyll & Bute (up 30%). 

Simon Rettie, Managing Director, Rettie & Co. said: “In over 30 years selling and letting properties in Scotland I have never experienced a level of activity and sustained demand such as we have seen post Covid.  

“It has been quite extraordinary. This demand has been evident in sales across the country, as John has commented, and equally as high for rental properties.  

“We are expecting to go into more seasonal markets as we venture forward but are confident there will be a continued demand for quality sales and rental properties.” 

A report by experts at Rettie has found that businesses boomed after the end of the pandemic

Dr John Boyle, Rettie & Co.’s Director of Research & Strategy added: “We have had a good return to business since lockdown ended in June 2020 and the strength of the recovery has surprised us.  

“We do expect market conditions to toughen but the market remains in a state of excess demand, which is supporting activity and prices.  

“A significant downturn is not currently expected but lending levels and unemployment will be the key bellwethers to watch to see how this plays out.”