May has been an unbelievable month in the property market. As May started, having watched a really strong performance in terms of sales and purchases in April, I expected to see a bit of a dip in May. That couldn’t have been further from the truth as it happens! However, before coming back to my own take on the property market, I’ll first focus on the news that lies behind what we are seeing with our own eyes. It’s been a mixed bag, with things looking great from a UK perspective, good news for first time buyers, and yet a wee bit of a kick in the teeth for Scotland, all emphasising that property really is a local concern where UK-wide stats are interesting and indicative of certain trends but where you really should do your research on your local area before committing to any purchase or when setting your expectations of what you can achieve on the sale of your property.
House Prices Up, But Scotland as a Whole Defies the Trend
Statistics released by the Office for National Statistics show a clear upswing in house prices across the UK, although the picture wasn’t quite so rosy for Scotland as a whole. These types of stats have to be used with caution at the best of times because they cover the whole of the UK and are hugely influenced by the runaway house prices that continue to affect the south-east of England where, in London in particular, prices have risen by 7.6% in the past year (http://www.thisismoney.co.uk/money/mortgageshome/article-2328538/ONS-House-prices-rise-2-7-UK-year.html).
The stats show that prices to March 2013 rose by 2.7% in comparison with the same time the year before. When London and the South East of England are taken out of the equation, house prices were up about 0.6% for the year. The figures showed that prices in Scotland dropped by 1.7% in the same period. So, should we be worried in Scotland by this?
Well, we certainly shouldn’t be getting our wallets out and jumping onto the housing ladder because we are expecting huge, rapid capital gains in most parts of the country. Scotland is very much a mixed bag at the moment: some areas remain firmly in the doldrums whereas others are experiencing robust and rising house prices. So, as always, you really have to look at the property market on a more local basis than simply base your decisions on national figures. However, as an indicator of the property market as a whole and of the UK’s attitude towards property, it is certainly not disheartening to see that prices, whilst not rising rapidly, are generally strong.
Lending Up Significantly
Mortgage lenders have reported one of their strongest months since 2008, suggesting that Government efforts could be prompting an upturn in the housing market. The Council of Mortgage Lenders (CML) estimates that £12.1 billion worth of loans were advanced in April, an increase of 21 per cent compared to the same time last year. The figure represents a 4% increase compared with March 2013.
The CML’s chief economist, Bob Pannell, was quoted as saying: ‘The true underlying position is that April is likely to have been one of the strongest months for lending activity since late 2008.’
What is perhaps most heartening for the property market as a whole is that the CML has reported an uplift in first-time buyer activity in recent months, partly helped by various Government schemes designed to make it easier for people to borrow.
What are we seeing happening in the property market in May? Short answer…a LOT of movement!
May has, quite simply, been breathtakingly busy and has been a record month on all fronts. With a full working week of the month left to go, we have sold 57 properties, have purchased 31 on behalf of our clients, and have already signed-up  (sorry, scratch that, I’ve just seen the figures change on my computer screen) 60 new selling clients. Given that our purpose in life, as a company, is to sell and buy properties for clients, it’s absolutely brilliant, as always, to see that we have sold almost as many as we have put onto the market, particularly during a month that is always going to be one of the busiest in terms of new properties coming to market.
In Edinburgh and the Lothians, it appears that any trends suggesting downward movement in property prices elsewhere in Scotland are not applying at the moment. What is most heartening is that properties of all types appear to be selling, not just those that are traditionally in the highest demand such as relatively-affordable (it’s a very relative term, of course) family homes. We certainly are not seeing vast house price inflation and, frankly, I don’t think that, after the boom and bust of the past decade, anyone really wants to see a return to those days. But what we are seeing is house price stability and very healthy demand, with almost as many properties selling as we are seeing people wanting to sell. This is absolutely excellent news for the property market.
A few years ago, when I put a property on the market I absolutely expected, hand-on-heart to sell it: about 95% of those properties would sell and I had market-wide statistics to back-up that, although I was out-performing the market, the market supported this likelihood of selling, in a decent timeframe and for a good price. In recent years, statistics for the whole market in our area show that the average time it now takes to sell a property is around four months and that about half of the properties coming to market actually sell. From a personal point of view, as someone who always wants happy clients, this is utterly depressing! So, to see figures like we have seen not only this month but also in the past few months where the number of sales has been so close behind the number of new properties coming to the market, is not only great for my frame-of-mind but also for the market as a whole and also for our clients.
Time will tell, of course, but it really does seem that a level of confidence has returned to the property market that I haven’t seen since early 2008. This has been backed-up by more readily-available lending (if you’re interested in comparing mortgage rates and getting free advice about your mortgage options, check out the brand new MOV8 Financial, Independent Mortgage Advisers site at www.mov8financial.com), more activity from First Time Buyers who are correctly described as the ‘life blood’ of the property market, and all of this does appear to be, far from creating another ‘bubble’, helping to get the property market moving again. Long may it continue!