I was very interested to read a report carried out by Savills which provided analysis of the last 15 years of land registry data. The conclusion of this report is that the UK property market is very much following previous trends in that the property market recovery is being led by the top end properties i.e. the least affordable properties in the most affluent areas. As Lucian Cook, Director of Research at Savills stated: “The bottom end of the market does not appear to have the potential to bounce in line with the top end, now or in the foreseeable future. Its recovery may only be possible if and when mortgage lending frees up or as investors start to see potential in the local private rental sector.”
This report very much coincides with my feelings in respect of the Scottish property market in general and the Dundee market in particular. We are seeing good activity in the middle to top end of the market with listings being ahead of targets. I am anticipating that sales will follow this trend, however, the lack of first time buyers is holding back the bottom end of the market with again the lack of first time buyers causing the major problems. Readers of previous blogs will know my thoughts regarding the problems that first time buyers face and the knock on effect this has on the market. Interestingly, I was reading a report regarding the Welsh property market which has now seen first time buyers dropping below 20%. This is the area that must be tackled. A recent ARLA report predicts a trend away from owner occupier from 70% to 60% and is also predicting a drop in the registered social landlord i.e. council housing and housing association with the big growth coming in the private rental market. This would certainly be a big social and economic shift and I will issue a blog on this topic shortly.
In the meantime prices for medium to top end properties are starting to slowly increase with prices for traditional first time buyer properties at best holding value.
Head of Property Services
- The Importance of First Time Buyers (blackadderspropertynews.com)