If you’re interested in what has been happening in the Scottish property market and beyond, you’re in the right place! Here’s MOV8’s May Property Market Update.
North-South Market Divide
Rising house prices in Scotland appear to be a continuing trend. However, as the market improves in the north, it’s a different story in the south of England.
According to the April 2018 RICS UK Residential Market Survey, house prices at a national level dipped marginally in April, while they continue to fall in London and the south east of England in particular. By way of contrast, house prices continue to rise in Scotland and Northern Ireland.
After years of non-stop growth in the south of England, it’s possible that Scotland is going to become more attractive to property investors looking to maximise their returns.
East Central Scotland Continues to Perform
In east central Scotland, the average selling price between February and April 2018 increased by 7.8% to £234,864 when compared with the same period last year, according to the ESPC’s April 2018 House Price Report.
This rise in prices has been combined with a drop in the number of homes sold, with the number of sales dropping by 6.6% between February and April 2018 compared with the same period last year. The drop in the number of sales can clearly be traced-back to a significant drop in the number of properties coming to market and to historically low levels of available stock for buyers. This inevitably has the effect of driving prices up. So, is this looking like changing?
Following a period of slower activity in February and March, April has seen some improvement in the number of new homes ‘listed’ (coming to the market). However, the number of properties listed between the months of February and April still decreased by 8.3% compared to the same period in 2017. Whilst the ‘Beast from the East’ will have had a significant impact here, the net effect is that house hunters in May are fishing in a smaller pool than they did last year and that competition among buyers is fierce.
Outside of Edinburgh, the market is not quite so hot but it’s still a seller’s market. The ESPC reports that average selling prices outside of Edinburgh are a little more modest than those mentioned above, with East Lothian experiencing a 1.1% increase year-on-year, a 3.2% increase in West Lothian and 12.7% in Midlothian.
90% of properties listed between February and April 2018 were marketed as ‘Offers Over’ compared with 82% in the same period of 2017. Selling times in east central Scotland are similar to this time last year at 22 days and the percentage of sales achieving or exceeding Home Report valuation has increased from 70.5% between February and April 2017 to 75.7% in 2018.
In short, if you’re even thinking of selling, now is a great time to be taking the first preparatory steps and arranging a valuation and getting a quote for selling your home.
Interest Rates Unchanged
In spite of some recent forecasts suggesting a rise in interest rates, this hasn’t yet materialised as the Bank of England announced earlier this month that the ‘bank rate’ would be maintained at 0.5%. This is good news for property buyers and homeowners who have a variable rate mortgage. However a rate rise is still possible later this year if there is more substantial evidence of economic activity.
From Our Point of View
After the inevitable sluggishness brought about by the heavy snow in March and April, the Spring property market seems to be catching up with itself now.
We have seen a large spike in the number of properties coming to the market and yet, in the past few weeks, the number of sales agreed has outstripped the number of new properties coming to the market. This demand has led to an average selling price significantly higher than Home Report valuation.
We of course act for buyers through our Conveyancing Department too. Although we have agreed a good number of purchases for buyers throughout May, there is no doubt that it’s a frustrating market for buyers. The competition at Closing Dates can be fierce and it is hard not to feel that some of our buyers have made the sensible choice by not overextending themselves to submit the highest offer at these Closing Dates. Nevertheless, that’s little comfort to someone who has set their heart on a property and lost-out.
We hear nothing of ‘Brexit’ or independence referendums in our discussions with buyers, so these external factors seem to be having little bearing on people’s decisions about their dream home or investments.
All in all, there is nothing to suggest that the current conditions are going to change any time soon or that the current seller’s market is nearing a close.
We’re Here to Help
If you are thinking of selling your home or investment property, get in touch with us by calling 0345 646 0208 (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.
You can also now instantly book a free valuation appointment, online, by following this link.