Summary – April has been a slow month and it’s partly Prince William’s fault…
April is traditionally a good month for the property market, with longer days and better weather leading to more property sales and more people putting their properties on the market. However, April 2011 has been a slightly unusual month though owing, largely, to our Royal Family. This is not a pro-republican statement, oh no. Rather, it appears that the impending Royal Wedding has led to people deciding to put big decisions on ice about both putting their properties on the market and also making purchasing decisions. Well, that and the school holidays, Easter and the May Day bank holiday. But it’s easier to pin the blame on someone whose face we’ve seen in the media every 4 seconds or so for the past month!
Before we get into that though, and our own experience of the property market in Scotland in April, let’s have a quick look at some of the news stories that have appeared in the Press in the past month.
What’s been happening in April in general property news?
The RICS (Institute of Chartered Surveyors) monthly housing market survey for March (released in April) painted a rather gloomy UK-wide picture but emphasised large regional variations in the housing market. The picture for Scotland was actually rather positive, with the ‘net balance’ reported by surveyors (the number of surveyors reporting rising prices versus the number reporting falling prices) being at its best level for six months. The comments of individual surveyors in the report was actually fairly optimistic, with most surveyors seeming to favour a view of continuing stability, albeit no outlook of higher transaction levels or rapidly rising prices.
The Council of Mortgage Lenders reported a 21% rise in mortgage lending in March when compared to February. This is against a backdrop of very low mortgage lending in February, however, and the amount lent in March 2011 is still 2% down on the amount lent in March 2010. Nevertheless, it certainly arrests a worrying trend seen last month in the amount of money lent to home buyers and suggests similar lending patterns to last year. We can only hope that the availability of loans for first time buyers in particular starts to rise as this sector underpins the whole housing market.
Finally, Halifax reported this month that it was actually cheaper for people to buy a property than to rent one. Hmmmmm! One can only assume that they are not including the conveyancing fees, Stamp Duty, repairs, decoration and most importantly the required deposit in those calculations! According to the reports, the average mortgage rate for a new borrower has fallen from 5.82% in March 2008 to 3.59% last month, cutting monthly payments by around 39%. This story was covered in the Scotsman newspaper and our Managing Director, Robert Carroll, was quoted in that article as saying: “For the majority of first-time buyers the purchase price is less of an issue than getting a mortgage or saving up a large enough deposit. Until lenders relax their criteria for first-time buyers, the idea of most renters being able to enjoy the potentially reduced monthly cost of owning a property will remain a pipe dream.” For the full article, see the following link: http://business.scotsman.com/business/Property-ladder-still-a-long.6758301.jp
What have we seen happening in the property market in the past month and what’s the outlook for May?
April has been a fantastic month if you like holidays and not quite such a good month if you are an estate agent!
Everything has to be placed in the context of the Easter school holidays being at the beginning of the month, followed by the Easter Weekend holidays (some people having both Friday AND Monday off work) and now the impending Royal Wedding and May Day bank holidays which have given us another long weekend. Many people have taken the three days between the bank holiday weekends as holidays too, meaning that for many people they will have spent two weeks with their children at home then almost two weeks off work. Holiday companies have reported record numbers of people going abroad during this period too, so there’s an above-average number of people out of the country.
Is this good for property sales and the supply of new properties coming to the market? Erm, no!
In March we experienced an unprecedented mad rush of people putting their properties on the market. We also experienced a record level of sales where, for the first time in a LONG time, we sold more properties in a week than we put on the market. April however has seen lower numbers both selling and coming to the market. Looking at the market as a whole though, this has been across-the-board and affected all estate agents in our area. It cannot be a coincidence when you look at the amount of holidays in the month.
The good news? Well, we’d have to urge patience and say that we expect things to pick up in May. Anecdotally we have heard a lot of people saying that they are waiting till May, after the holidays, to put their properties on the market. These same people will be looking for properties to buy, so we’d expect to see a much-increased number of enquiries coming through from purchasers in May too. The housing market appears, for the time being, to be relatively stable, neither rising nor falling drastically. Demand remains high also for certain types of properties in particular, most notably family homes. With the longer nights and better weather, we’re expecting May to be a great month. But first we have to get the Royal Wedding out of the way…
Here’s hoping that you all enjoy the great weather, the pomp and circumstance and the long weekend and we look forward to our next update in a month’s time!