What’s Happening in the Scottish Property Market and Property Prices – MOV8 Real Estate November 2012 Update

What’s Happening in the Scottish Property Market and Property Prices – MOV8 Real Estate November 2012 Update

Deck the Halls…

With Christmas songs playing in every shop in town and people already talking about whether they are going to be serving turkey on 25 December or whether they are considering breaking the mould by serving some fashionable new bird like a steroid-enhanced speckled sparrow that they thought looked good on an episode of Jamie Oliver’s Pukka Chrimbo, you could be forgiven for thinking that the world and the property market would have ground to a halt. You would, however, be as very wrong as the person who after reading this article goes to Waitrose to try and buy a steroid-enhanced speckled sparrow. Property market news this month is particularly surprising!

This month I’ll review the Press coverage of the property market in the past month and also, as always, let you know what my view on the state of the property market in the past month has been as someone who sees it on a daily basis.

November Press Coverage – There’s Nothing to See Here, Sir, Move On Please…

November’s Press coverage of the property market in Scotland was about as sensational as news that a coffee shop owner was spotted buying a pint of milk. It’s still worth covering the non-sensational news though, because the story is actually in the lack of sensational or surprising figures…

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Repossessions in the UK have hit a 5 year low, hitting the lowest level since 2007, a time when the property market and economy were really strong. Of course we are in a time of low interest rates and enforced forbearance towards borrowers in arrears, so that helps these figures and perhaps does not tell the whole story: if interest rates were to rise significantly, or if the lenders took a tougher line towards people in arrears, this could change the picture. What is perhaps more important at the moment is that the level of people in arrears has stayed pretty stable at something a little short of 200,000 people. This suggests that the number of people who are actually putting themselves in a position where they could be repossessed is not increasing, which is always a good sign for the property market and the economy as a whole.

The latest house price survey from Nationwide building society also showed that house prices across the UK were largely stable. Nationwide state that the stability has been caused in part by better-than-expected employment figures in the UK. The survey showed that prices were 1.2% lower than in November last year, across the UK, but that prices hadn’t actually fallen since the last survey. Even better news was that, UK-wide, property sales in the first 10 months of the year were 7% higher than in the same period last year. So, although prices have fallen slightly, the number of transactions has actually gone up fairly significantly, suggesting that people are regaining confidence that the market has bottomed-out and are more confident now to move home.

As I said, the big news in these stories is perhaps the lack of big news: they suggest continued stability, a slight improvement in confidence in the market amongst property buyers, and only a slight fall UK-wide in property prices. None of which will get me jumping up and down and throwing every penny that I own into property, but none of which has me running to the hills either!

What Have We Seen Happening in the Property Market in the Past Month? Put It This Way…It’s a GREAT Time to be a Property Seller!

Any statistics showing that the property market activity is higher this year than last could not be more borne-out by what we have been seeing! It is BUSY at the moment. What? In the run-up to Christmas? Yes, yes, yes. BUSY. Why?

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At the end of the day, the reasons why people generally want to buy a new house don’t stop existing just because the days have got a bit shorter: relocation, moving-in with a partner, marriage, divorce, family getting bigger or indeed smaller. And all the people who were looking for a house in October and didn’t all find one don’t suddenly stop looking. Plus everyone who has sold their house in autumn is suddenly in quite a hurry to find something that they can move into to avoid a period of renting a house.

However, because everyone seems to think that it’s a bad time to sell, there’s not anything like the normal supply of new properties coming to the market. Which means that buyers have a pretty stark decision: buy now even if it’s not perfect or hope that something good comes on the market in the next week or so and then snap it up.

I personally bought my own flat as a first time buyer in late-November 2005 and I can remember, even back then, wondering how on earth I was going to find anything: there was just nothing good on the market compared with a few months earlier when I hadn’t been in a position to buy. In the end, out of frustration, I ended up buying the one that I still live in and call home. But in reality I probably over-paid slightly because I just didn’t want to have to wait until the next again year to find something. We are seeing buyers in exactly this position at the moment.

We are encouraging any seller who will listen to us that, if they have a nice property, now is absolutely the time of year to get it on the market. Of course, we totally understand that Christmas and the holiday period are a busy time and that there are practical reasons why people wouldn’t want their house on the market at this time of year. However, if you don’t have that reason, your house stands a very, very, very good chance of selling at this time of year. Why? Supply and demand.

Now, stop me if I get too technical here…there is absolute hee-haw (to quote Adam Smith…I think) coming to the market at the moment. And there are lots of buyers out there who are fighting over the scraps. Putting a property on the market at the moment is a little bit like throwing a juicy bone into a kennel-full of hungry dogs (Maynard Keynes…possibly).

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And do the statistics back this up? You bet they do! Throughout the year, the number of properties that sells is about 50% of the number of properties that go on the market. So far, in November, we have sold 200% the number that we have actually put on the market. And trust me, we have been trying hard to get them on the market! It has been our second-busiest month of the year for property sales in terms of the total number of properties that we have sold. Way, way busier than in spring.

So, what’s the lesson from all of this economics mumbo-jumbo, Robert…?

If you are a buyer, try to be patient at this time of year. As much as we try to avoid this happening, the majority of property sellers will wait until the spring to put their property on the market. And whilst that’s fine and properties certainly do tend to look brighter and gardens look better at that time of year, it does mean that the market can become a bit overloaded with property at this time of year. So, as a buyer, you will probably have the most choice during this period.

If you are a seller, make that leap of faith and get your property on the market in the near future. Indeed, some properties are actually more attractive in winter, in my opinion (particularly those that are cozy, have good lighting, are warm, and generally are inhabited). There is less competition than at other times of year and, trust me, there are still buyers out there. The fact that we don’t close over the Christmas holidays, except for Christmas and Boxing Day, is testament to the amount of enquiries that we still handle over that period. It makes sense: people are sitting around at home, on the internet, possibly wishing that they had another room in the house that they could escape to (only joking about the last bit…well, kinda!).

That’s it for this month, but I hope you enjoyed our update this month and that, if you did, you might think about using the Social Sharing buttons and share it with your friends on Facebook, Twitter or LinkedIn!

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I'm Robert Carroll, Managing Director of MOV8 Real Estate, Estate Agents and Solicitors. MOV8 is an innovative and forward-thinking estate agency and solicitor firm with its Head Office in Edinburgh, UK. It is one of the fastest growing firms in the east of Scotland. I see first-hand every day what is actually happening in the property market and am regularly quoted in the Scottish Press in property stories. Through this blog I aim to give an honest, fresh and sometimes light hearted take on what is happening in the Scottish property market for anyone who is interested in that kind of thing...

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