So what happened to the Scottish property market in the summer?
As readers of previous blogs know, I caveat all my blogs, especially updating on trends by saying these words are my own personal view. I think that here at Blackadders where we have a substantial presence in Dundee, Arbroath, Forfar, Edinburgh and Aberdeen dealing with property transactions throughout the whole of Scotland, makes us uniquely placed to comment on the Scottish property market. I have been astounded this year by the number of opposing surveys and trends and as it’s often said, you can make statistics say anything that you would like them to say. I have read reports showing the number of first time buyers have increased, the number of first time buyers have decreased, the amount of mortgages coming on to the market increasing, the amount of mortgages coming on to the market decreasing, so what is now my overall feeling?
There is no doubt that the number of properties coming on to the Scottish property market has not increased as rapidly as we would have liked and I refer you back to a previous blog regarding stagnation – 4 November 2013. As mentioned, the shortage of properties coming on to the market has led to increased price volatility with a huge increase in the number of closing dates and significant price increases for properties that have been correctly marketed and that are in the right area. This has led a number of developers also selling out all their stock for 2014 and, in my opinion, the new properties coming on the market are the key to getting the housing market moving.
In relation to first time buyers, like the many surveys, I have a mixed message here. I think the number of first time buyers has probably increased due to targeted assistance from the Government. The Help to Buy scheme, however, has now been withdrawn and the Help to Buy scheme that was targeted at newbuild properties was wrongly set up, allowing first time buyers to miss out the traditional first time first step property, causing part of the housing market to actually stagnate. I also think that the Referendum in September is also now having a brake effect on the market, both curtailing property investment in Scotland and also putting some people off putting their property on the market, thus accentuating the shortage.
I also have a slight suspicion that the increasing economic confidence and job security that has happened to many people has actually caused a lot more people to think this year about summer holidays, postponing their property move until the following year.
So what about Autumn? I anticipate it starting probably late September when there will be a steady increase in the number of second-hand properties coming on to the market. I also think that the developers will be in a better position to start fulfilling demand for 2015. This will cause second-hand stocks to increase and create a pool of expectant buyers, meaning that 2015 will see the start of a huge increase in transactional levels. I think that there will be an increase in the number of property investors, both individuals and institutions, coming into the market. I also hope that the Government comes up with a refined plan to carry on assisting first time buyers to get on to the property market via the second-hand market.
The figure that I will be watching very closely at the end of October 2014 is the number of properties coming on to the market. If this shows a significant increase compared to 2013, then I feel that the property market will move forward considerably in 2015. If this figure is the same, or down, compared to 2013, my concern is that 2015 will be a year of stagnation with more pressure put on the developers to come up with part exchange and other novel schemes to assist people in moving property. I also have a concern that the Bank of England will move too quickly in to put up interest rates and I worry this may nip any recovery before it has time to get hold in the market.
I will continue to report on trends.Lindsay Darroch Partner – Head of Property