As we approach Spring, the Scottish property market is beginning to crank into life as national lockdown restrictions begin to ease, children return to school, the vaccine continues to roll out and, of course, the longer & brighter days draw in.
Low Stock Levels Set To Change
Last years phenomenal market performance has certainly had an early impact on stock levels. Properties that would traditionally carry into the new year were absorbed by the frenzied buying nature at the tail end of 2020 and this has had a notable knock on effect on the market with stock levels in Scotland down by circa 24% versus this time last year and new sellers are also down 21% in January compared to the end of 2020.
Despite house moves still being permitted in the Scottish Government’s new year lockdown restrictions, the closure of schools coupled with a firm ‘stay at home’ message has understandably caused many to delay bringing their homes to the market place.
House prices in January remained more or less level with a slight increase, which is highly encouraging after a national average year-on-year increase of circa 9% according to the latest report from the Registrars of Scotland. Fears that prices may begin to turn downward were alleviated in February as a further 2.2% growth was reported and this can be taken as a marker of what may be set to come with further prices rises likely to continue through March and into April.
This mild upturn in value is most certainly driven by the low stock & high demand nature of the market right now, however it must also be said that buyer demand is so strong that when stock levels begin to pick up from Spring onwards, prices should grow in tandem due to the buyer/seller ratio being so heavily weighted in favour of the former.
Traditionally March is when things begin to move in the property market as the brighter weather tends to draw sellers to the market and buyers aim to conclude a new house for summer.
This year looks set to follow in that mould, however there are a raft of new measures and support coming that have the potential to supercharge the market place and could act as a catalyst to accelerate performance.
Buyer demand is at an all time high and there are circa 45% more active buyers than there were pre lockdown 1.0, back in April 2020. As Spring begins to warm up, enquiry levels are following suit with Rightmove reporting an 18% increase in enquires being sent to agents.
The highest demand for property last year was centred around family homes and that looks set to be a key theme for this year, the challenge in January & February for sellers of such properties was having the burden of home schooling and lack of childcare to juggle on top of working from home and general lockdown implications. Now that children have returned to school this will free up time for the conversation to begin on moving home and stock levels should begin to creep up.
Chancellor of the Exchequer, Rishi Sunak, unveiled an aggressive budget which includes mortgage support for home buyers with small deposits to get on the housing ladder by giving incentives to lenders to offer 95% mortgages. His mantra of turning ‘Generation Rent’ to ‘Generation Buy’ is certainly an encouraging one. Whilst these mortgages are not reserved to first-time buyers or new-build homes, there will be a cap of £600,000.
From April 1st this year the Scottish Government backed First Home Fund will also begin to accept new applications as a £60m pot becomes available to support first time buyers. The First Home fund is essentially a shared equity scheme where the Scottish Government will contribute up to £25,000 interest free toward the purchase of your property – the initiative was piloted last year to great success helping 8,000 buyers purchase their first home.
The introduction of the First Home Fund and low LTV mortgages will most likely be a boost in particular to Glasgow’s West End and inner-Southside areas that need a regular fresh influx of buyers to churn the lower end of the market in order to create more agility in the mid-sector.
Personal Touch Drives Top End Sales
House sales of over £1m dropped in Scotland by almost a quarter last year, whilst they grew in other parts of the UK – arguably a benefit of stronger Stamp Duty incentives issued by Westminster in comparison to Scotland’s temporary change to LBTT threshold.
Corum bucked the downward trend and actually exceeded our own record for sales of million pound homes with circa 30 sales agreed over the last 12 months through a combination of public and private sales.
The reality is there are hungry buyers at all points on the price spectrum, however in the face of socio-economic uncertainty both buyers and sellers alike have wanted greater reassurance and guidance, which has allowed our traditional approach to estate agency to flourish and generate results as we have helped navigate sales through genuine match-making rather than relying on the ‘click & collect’ culture certain competitors operate.
We fully expect sales at the top end of the market to remain consistent this year and the number of private sales being developed is higher than at any point in Corum’s 18 year tenure.
Should you sell now?
There has arguably never been a better time to sell your home than right now. House prices in Scotland have rocketed by 9% over the last 12 months, and as much as 15% in Ayrshire and Renfrewshire, as the swathes of active buyers competing for limited stock are willing to pay a premium well beyond HR value.
A key example in Ayrshire was a property on Belleisle Drive at Offers Over £950,000 selling for in excess of £1.6m. Now, whilst that is most certainly a marquee example, a similar trend is apparent across the board right now and seldom have Corum sold below HR value over the last 12 months.
Sellers with a property in a popular area can fully expect a premium to be paid for their home and those living in Glasgow’s affluent and sought after suburbs of Bearsden, Milngavie, Giffnock and Newton Mearns can be very optimistic about potential return as family homes remain the key driver for the majority of the market.
It is an interesting time in particular for downsizers considering selling. With such strong premiums being paid for family homes, it offers those willing to drop down to a smaller square footage, move to an apartment or set out for a coastal or more rural location the chance to generate considerable positive equity.
New Homes Outlook
The knock-on effect of lockdown restrictions for certain developers has caused many build programmes to be greatly effected, pushing completion dates backward and thus putting themselves out-with the considerations of those looking for a swift move or those that sought to take advantage of the temporary cut to LBTT.
As the year progresses and the distance to completion for various developments shortens, coupled with the aforementioned First Home Fund and 95% mortgage guarantee, it is reasonable to assume that off-plan new-home sales will accelerate as we enter Q2 and continue through Q3.
For developments that are either complete or nearing completion, sales have been excellent in the first part of 2021. Corum introduced Parkway in Glasgow’s Park area which has had fantastic initial uptake, whilst Cathcart House is down to its final plots and luxury family new builds from Martin Homes in Uplawmoor sold out in very quick fashion.
Corum are thrilled to welcome CALA Homes high profile Jordanhill Park development to our estate as well as West End developments Belmont West (Hillhead) and The Works (Yorkhill). In Ayrshire we have partnered with Westpoint Homes on their Seafield Gardens development and are set to launch further developments in the coming weeks with with Panacea Homes (Helensburgh) and Strathcarron Homes (Southside) whilst we remain McCarthy & Stones sole partner for residential listings in Scotland.
The introduction of these new developments to our already well established portfolio that includes the high profile City Garden Apartments, Cathcart House and G3 Square developments to name but a few has made Corum the leading estate agent for new homes in Greater Glasgow and the West of Scotland, something the company aims to drive forward with a very strong pipeline of business set to come to the fore in 2021.