IS THIS THE WINTER OF OUR DISCONTENT – PROPERTY MATTERS

Welcome to the first property blog of 2018!  Rest assured that this year will see more property blogs. I predict that 2018 will be a very interesting year for the property market. Before I give you my predictions for 2018 though, how did I get on with my predictions for 2017?

Looking at my blog on the 9th of January last year I predicted a 5% decrease in market activity with a slight increase in house prices averaging around the 2% to 4% mark.  Whilst I think I was correct in relation to the general road of travel, the decrease in activity in the property market (especially in the second half of the year) appears to have been steeper than even I had predicted. As yet, I have not seen the final stats for 2017 and obviously there are geographical differences to take into account, but I would predict that Scotland overall would show a decrease of between 10% and 15% in relation to properties coming on to the market, with a perhaps more significant increase in average house prices, probably around 5%. There have been recent reports advising that November saw the sharpest drop in mortgage approvals for a number of years and as different areas start issuing their stats, I think this general downward trend will be repeated. Dundee flats - LDD blogOn to 2018 and I am actually looking at this year with more optimism than the last year. What is the reason for the optimism? Like a bottle of champagne being constantly shaken, the housing market, with its links to lifestyle choices, will eventually not be contained no matter what the economic background. I suspect that 2018 particularly the second half of the year will show this and although uncertainty around Brexit will continue it will become something that we live with. As economic uncertainty fades and as general lifestyle requirements kick in, I think we will see an increase in activity in the housing market.   I also think that developers sensing the lack of supply and price inflation, have now started to increase their build output. I believe that this will be the oil that greases the wheels of the property market especially if the developers offer part exchange and other incentives.

In relation to specific areas, I would comment as follows:-

1. ABERDEEN & ABERDEENSHIRE – I am starting to see green shoots of activity coming through the Aberdeen property market and whilst it will take some time for the extra stock to clear, I do believe that Aberdeen is on the cusp of recovery. Although we will not get back to the highs of pre 2010, we will over the next 18 months move very quickly towards some form of normality and a free flowing market.

2. DUNDEE – As the V&A moves towards its opening and Dundee Council carry on with their exciting plans for the development of the waterfront area and the city in general, I do think that Dundee is on the cusp of very exciting times in relation to the property market. In particular watch this space in relation to flats down at the waterfront which are looking very reasonably priced and very attractive for investors and also residents.

3. ANGUS – The Angus market continues to prove robust and as Aberdeen continues to improve expect more of this heat to work its way down the coast, in particular Montrose, Brechin, Arbroath, etc.

4. PERTH & PERTHSHIRE – This market is proving very difficult as its driver in the early 2000s was the heat from the Edinburgh market. Unfortunately, I cannot see a big increase in the Perth property market, although I do predict more stability and a slight increase in activity.

5. FIFE – This also appears to be a difficult market, however with some hot spots, St Andrews in particular proving very popular and prices continuing to exceed expectations. Again, I predict a degree of stability in the Fife market.

6. EDINBURGH – I see potential for further growth in the Edinburgh market. I think that the developers will continue to produce stock for this market and as such, I am anticipating some significant growth, both in terms of activity and prices in 2018.

7. GLASGOW & the WEST – Again, I am seeing positive signs and think that in particular the second half of 2018 will show significant increases in activity in the Glasgow market fuelled by a mixture of newbuild development.

Overall, I am predicting a slightly quiet first three months for 2018 with a steady increase in activity for the remainder of the year culminating in activity levels being up by 10% and prices increasing by 5%.  As always, watch out for the first quarter figures as this will be a good indication. The phrase “more optimistic than last year” probably sums up my feelings.

I will continue to provide blogs on aspects of the property market and also watch out for some interesting additions, including “dinners for winners” – my take on the late, Michael Winner’s weekly column in the Sunday Times.

Finally, I would wish all readers a happy and prosperous 2018.

LDDLindsay Darroch
Partner
Blackadders LLP
@LindsayDarroch

www.blackadders.co.uk

 

FURTHER HOTEL DEVELOPMENT IN DUNDEE

I was delighted to hear the recent announcement in relation to the opening of a new Indigo Hotel in Dundee.  This significant investment will transform one of Dundee’s mills and will add 96 bedrooms.  I understand that work will commence sometime in 2017 with completion expected in the summer of 2018.  This investment will breathe life into the east end of Dundee and is another welcome example of the rebirth of the City.  This will follow the launch of budget hotel chain Sleeperz to the City, part of the redevelopment at Dundee railway station.  A proposed boutique hotel for customs house and various other hotel investments continue to reinforce Dundee as an up and coming tourist destination.  I also understand that there will be some announcements from Dundee Council in the next few weeks in relation to further projects at the Dundee Waterfront.  It is great to see Dundee continue to go from strength to strength and a very exciting time to work, live and be part of the City.

Lindsay Darroch
Partner – Head of Property 
@LindsayDarroch
www.blackadders.co.uk

COME FLY WITH ME – PART II

Readers of my blogs will know that I am a great advocate for the City of Dundee and think that the improvements that are taking place under the guidance of the Council are absolutely wonderful.  This includes not only the V&A but also the new railway station, Malmaison, various hotels and other regeneration projects.  Like most Dundonians, I was very disappointed to hear about Flybe’s decision to cancel its direct flight from Dundee Airport to Amsterdam.   I would call on the Scottish Government to take steps to rectify whatever caused Flybe to cancel this flight and should it be the infrastructure and technology available at Dundee Airport then this should be rectified as a matter of urgency. If this cannot be rectified then I would urge the relevant authorities to consider creating a hub airport at Leuchars.  Not only would this be a welcome investment into central Fife, it is vital to Dundee and the surrounding area that there is a local, regular international airport connection.  This would allow Dundee to build on the momentum of the V&A and would also increase the number of visitors to Dundee or, at the very least, make it more likely that they stayed in some of the new accommodation being built in the city.

Lindsay Darroch
Partner – Head of Property 
@LindsayDarroch
www.blackadders.co.uk

Multi speed property market recovery

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.

Lindsay Darroch
Head of Property Services

Blackadders’ 3rd Annual Property Sale

Blackadders annual property saleI am delighted to advise that our 3rd Annual Property Sale is now bigger and better than ever with 57 properties taking part and with savings of up to £50,000 from Home Report valuations.

I think this initiative shows prospective purchasers the possible bargains that are out there and the fact that it is a great time to be buying.  It also shows our innovative  and pro-active approach to selling properties.

Should you require further information then please do not hesitate to contact either myself or a member of the Blackadders Property Services Team.

Click here to view the properties taking part in this sale.

Lindsay Darroch
Head of Property Services

V & A Dundee receives £4.8 million pledge

Image: Design Dundee Ltd/PA

I was delighted to read in the Dundee Courier about the £4.8 million pledge received from the Scottish Government.  This would appear to be a key piece of the jigsaw and a catalyst for taking the V & A in Dundee to the next stage.

As readers of previous posts will know (14 October 2010), I think the importance of the V & A to the Scottish economy in general and Dundee economy in particular will be huge, and that the venue will go a long way to enhancing Dundee’s reputation as a leading UK city.  The knock-on effect for the property market will be more visitors, more purchasers, more people realising the huge untapped potential of Dundee.

I would urge everyone to support the V & A project and work together to ensure that it happens.

Lindsay Darroch
Head of Property Services

Encouraging signs for property investors

Readers of previous blogs will know that I have been closely monitoring the increase in rental returns across Scotland,  in particular Dundee, and I would advise that this trend shows no sign of abating.

With the property market currently showing subdued activity levels due to mortgage pressures (and also the weather), there has never been a better time for someone interested in property to invest in the property market.

The caveat to this is that it is very important that you take advice from solicitors experienced in property investment.  I would be more than happy to have an initial no cost meeting with you to discuss the various options available to you.

Lindsay Darroch
Head of Property Services
T: 01382 229222
E: lindsay.darroch@blackadders.co.uk