The bounce back of the Scottish property market
If we look back on the start of lockdown, we could never have imagined the residential market bouncing back in the way that it has. The release of pent up demand has encouraged exceptionally high levels of market activity and with a large volume of property coming to market, competition is high, with closing dates being set on a frequent basis. This may be a mini-boom, but it is showing no signs of slowing down quite yet, despite the prolonged effects of Covid-19, Brexit uncertainty and the possibility of a second independence referendum.
Properties in Edinburgh and Glasgow are selling faster than any other cities in the UK with the UK average currently being 27 days, while Edinburgh homes are selling in just 17 days. It is undoubtedly a good time to sell, with properties often achieving well in excess of Home Report valuation. And there are indications that this upward trend is set to continue over the next five years.
With people unable to move during lockdown and therefore spending more time in their homes, it has been a time to think about what their needs are. Inevitably these needs have changed with more of an appetite for outside space and an extra room to work in now higher up the wish list.
The trend continues where buyers are offering ‘subject to sale’ which can present a challenge in a competitive market, but it can provide some security to the buyer. In our experience sellers often accept a lower offer where there is no chain involved, as for them there is real value in certainty.
Interestingly first time buyers do not seem deterred by the competitive marketplace. A Land and Buildings Transaction Tax holiday was introduced in Scotland on 15th July 2020, and LBTT is only payable on prices above £250,000 up until 31st March 2021. It is not quite the incentive that has been introduced south of the border, but it appears to have encouraged first time buyers to take the next step and commit to homeownership. There are other incentives available including the First Home Fund and Help to Buy Scheme to help people to take their first step on the property ladder. The difficulty that many first time buyers face is obtaining a mortgage. Low deposit mortgage deals have reduced significantly in recent times, with many lenders now seeking a 15% deposit and working with stricter lending criteria. Parents and other relatives are often called upon to bridge this gap.
We understand that some people are still anxious about the marketing process and in particular allowing viewings in their home given the current restrictions, so at Gillespie Macandrew we have developed protocols which ensure our clients can market properties safely – detailed information on these can be found here. We are using Matterport technology to provide 3D walk-throughs of properties, to give a sense of how the property really looks and feels. We have found that this helps to encourage only genuinely interested parties to arrange a physical viewing. Whether you’re thinking about buying a new property or selling your home, Gillespie Macandrew can help with all your property needs.
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