As January draws to an end, what trends are showing in the Scottish property market? There has been a spate of reports regarding increases in UK house prices and the recent property transactions that I have dealt with would indicate that this is being replicated throughout Scotland. As the economy continues to improve and confidence returns, the number of purchasers and the amount of mortgage funds available to borrow is increasing.
The increase in purchasers and mortgage funds is increasing far more rapidly than any increase in the number of properties coming on the market, repeating a trend seen in 2013. The impact of supply and demand being out of synch is being shown by price spikes in certain locations throughout Scotland. I know from discussions with a number of large developers that there are a number of developments coming on stream over the next couple of years but this will not impact on the 2014 property market.
My focus for the property market would remain similar to previous years but focussing on the removal of all barriers to encourage new properties on to the market – this includes developers. My plan would be as follows:-
1. UK, Scottish Government and Local Governments to do all they can to remove planning barriers to enable developers to embark upon a major house building and development programme.
2. Increase in Bank funding and support for developers (large and small) to increase the supply of houses coming onto the market.
3. The abolition of the Home Report – this is more than ever looking like a tax on house selling and is clearly a barrier to the number of properties coming on the market (a blog to follow).
4. Continued support for first time buyers – without them the property market will not flow freely.
In conclusion, I think that January has shown a slight increase in the number of properties coming on to the market but it is certainly not the big whoosh of properties that a number of property experts had been expecting. It is too early to use the dreaded word “stagnation” and I think matters will become clearer at the end of February.
To use the words of Corporal Jones from Dad’s Army – “don’t panic” – at least not yet!Lindsay Darroch Partner – Head of Property