House Prices Continuing to Increase and Selling Times Continue to Fall
Continuing the trend that we saw throughout 2016, latest reports from the Edinburgh Solicitors Property Centre (ESPC) show that house prices throughout East Central Scotland increased 3.7% in the period from November 2016 to January 2017 when compared with the previous year. Whilst house prices have increased, selling times have also decreased from 35 days to 26 days during the same period. This is in line with the pattern that we saw throughout 2016 and is a direct result of steady buyer demand combined with a reduction in the number of properties coming onto the market leading to an imbalance between supply and demand.
The latest publication of the UK House Price Index (UK HPI) from Registers of Scotland shows that the average price of a property in Scotland, as a whole, in December 2016 was £141,553. This is an increase of 3.5% on the previous year and a decrease of 0.2% when compared with the previous month.
The patterns that we have seen so far in 2017 have been broadly in line with our Annual Predictions for 2017 which we published at the end of 2016.
Slight Improvement in Property Supply
The volume of residential sales throughout Scotland in October 2016 was 8,329 according to the UK HPI, a decrease of 14.7% on the previous year and a reduction of 10.9% when compared with the previous month. When compared with the rest of the UK, this reduction is relatively favourable. In the same period, England saw year-on-year decreases in sales volumes of 34.5%, Wales experienced a drop of 25.9% and Northern Ireland a fall of 17.6%. Nevertheless, this reduction of sales volumes is indicative of a wider issue of lack of homes coming to the market and it leaves buyers with very little to choose from.
Commenting on these figures, Registers of Scotland’s Director of Commercial Services, Kenny Crawford, said, “Sales volumes figures for September 2016 showed the first year-on-year increase in Scotland since March 2016. However, this growth has not continued into October and volumes have decreased by 14.7% when compared with last year.
“On the other hand, average prices continue their steady growth year-on-year. With the exception of March, every month of 2016 showed an increase in average price when compared with the previous year. There was a decrease of 2.5% in March 2016, but this followed on from a particularly high price increase in March 2015. In addition, there were no average price decreases year-on-year throughout 2014 and 2015, with the last decrease being recorded in June 2013.”
In spite of these quite startling figures, the latest data from ESPC actually showed that the volume of property sales throughout East Central Scotland between November 2016 and January 2017 decreased by just 0.5% when compared to the previous year whilst the number of homes coming to the market in fact increased by 2.4% annually. This may indicate a seasonal upturn following the market’s usual slowing down in the lead up to Christmas and New Year.
Nevertheless, looking at the picture throughout Scotland and the rest of the UK, it is clear that seller confidence remains an issue for the market as a whole. In spite of rising prices and falling sales times, it seems that potential home sellers are reluctant to take the leap at the moment as a result of a lack of choice of properties for them to move to. When trying to identify further causes, we have little doubt that changes to Land and Buildings Transaction Tax (LBTT), in particular, the LBTT Additional Dwelling Supplement which was introduced in 2016, have affected people’s ability to move home.
In spite of this, there really never has been a better time in the last few years to get your home on the market and achieve a fantastic result. For tips on how to reduce the risks of getting your own home on the market before you find your next home, have a wee look at our video here.
We’re Here to Help
If you are selling your home or investment property in 2017, please do get in touch with us by calling 0131 202 5444 (Option 1) or by emailing [email protected] to organise a free valuation of your home or to get a full, transparent breakdown of the costs of selling your home. Our expert Valuation Department can help you with suggestions to maximise the appeal of your home to buyers and get the best possible price if you are selling. For more tips about preparing for a property valuation, you can also check out our YouTube video, Getting the Best Possible Property Valuation.