With Edinburgh being awash with jokes, sadly there haven't been many jokes to find in the coverage of the property market in the Press this past month. Depending on the publication you have been reading on any particular day, you could be forgiven for thinking that we have been in the midst of rollercoaster-esque ups or downs. The truth of course, as always, is to be found somewhere in the middle.
I'll give you a wee outline of what's being said by others before coming back to what our experience is telling us is really happening in the property market. I warn you in advance, the headlines in the past month could leave you having mood swings like Charlie Sheen the morning after a particularly heavy session. On with the show...
This Month in Other People's Words
[Oh no...] Poor consumer confidence has dashed hopes of a recovery in the depressed Scottish housing market, the latest survey shows today. Average house prices fell by 3.7 per cent across the country between May and July compared to a year ago, Lloyds TSB Scotland said. - The Scotsman
[Oh yes...I think...] House prices rose in many areas of the UK in June compared with the previous month, but year-on-year values have fallen, government figures show. On average, prices increased by 0.6% in June compared with the previous month, the Department for Communities and Local Government (DCLG) said. The annual change was sharpest in Northern Ireland, where prices fell by 8.1%, followed by Wales, down 5.6%, and Scotland, down 2.3%. - BBC News
[Oh good...] Mortgage lending to house buyers is starting to pick up, according to the latest figures from the Bank of England. In July, a further 49,239 mortgages were approved, but not yet lent, to house buyers. That was the third monthly increase in a row and means approvals were 3% higher than in July last year. The figures suggest that sales may start to rise gently in the coming months. - BBC News
[Whoop whoop...!] There was some cheer for homeowners today as new figures suggested prices have risen ten per cent in Edinburgh in the last year. The claim from Lloyds TSB showed that the average house price for the year to July 2011 was £229,720, the biggest rise in Scotland. - Edinburgh Evening News
So What Does This Mean? What is Actually Happening?
They do say that there are lies, damned lies and statistics. However, this month's salient stats seem to be playing poacher and gamekeeper at the same time.
The statistics saying that prices in Scotland were down 3.7% and the ones saying that Edinburgh prices had gone up by 10% were published on the same day. In many cases, in the same newspaper. The bad statistic came with the headline, "Falling house prices dash recovery hope." The positive statistic carried the headline, "Experts hit the roof as new survey suggests 10% rise in house prices."
However, the eagle-eyed amongst you will have noticed that the statistics are from the same report by the same lender. So how can both statistics be compatible? Especially when the statistics from the Department for Communities and Local Government (DCLG) suggest that prices in the Scottish 'region' are down around 2%.
The obvious answer is that the headlines are based on pretty dodgy statistics, based on a very small cross section of properties in the Scottish property market and even smaller number when you break it down to the local areas of Scotland. What is of course frustrating is that these headlines are overwhelmingly negative and quite alarmingly so in some cases. And these statistics, whilst clearly contradictory, are picked up on with gay abandon and a healthy dose of gusto. So what's actually happening?
The more balanced view of all of these statistics, I think, would be that we have been seeing a gradual decline in property prices throughout Scotland. This is hardly surprising given the economic backdrop in the past few years and, since it's hardly rosy in the garden of world economics at the moment either, it's unlikely that this trend will be dramatically reversed overnight. However, these price falls are not as drastic nor do they paint the doomsday scenario that the Press makes out a lot of the time. With mortgage approvals rising for the third successive month, it's actually looking relatively positive when it comes to the chance of the number of property transactions increasing in the next few months.
I'm happy to report that the property market, most particularly around Edinburgh and the Lothians, really isn't as bad as everyone has been making out.
At MOV8, we've had a fantastic August, particularly with regard to numbers of property sales. We haven't seen the huge surge of new properties coming to the market that I was personally expecting to see as perhaps the school holidays have had a continued effect on people's desire to put their property on the market. However, last week alone we sold 10 properties, more than we put on to the market.
That is quite an incredible statistic considering that we are one of the ESPC's top agents in terms of volume of listings. If you were to believe a lot of what is being said, including by some of our competitors' valuers to potential property sellers, that apparently nothing is selling and prices are falling, does this just mean that we're abnormally amazing? Or does it mean that there is actually still movement in the property market? I'd of course like to say it's the former! In fact, it's most certainly partly the latter: the property market, at least in the geographic areas where we are marketing properties, is not as bad as the Press or some of our competitors are making out. Indeed, the increase in mortgage approvals suggests that not only is demand increasing but, most importantly, the number of buyers who actually have the finance to purchase a property is increasing.
As for property prices? Well, in our experience they are pretty stable. Same old news really. Our valuers are not going out to properties and telling people that prices have gone down compared to similar properties that have sold in the past few months. Equally, they're not going out and promising drastic price rises. It's pretty much same old, same old. All of which of course doesn't make for great headlines and won't sell papers, but it's the true position in the market that we're experiencing.
Now, after all that heavy property chat, and as promised, back to jokes. For the Top Ten best jokes from the Edinburgh Fringe, as well as the worst courtesy of Paul Daniels, click here: http://www.bbc.co.uk/news/uk-scotland-14646532.