October followed in the same vein as the previous months post-lockdown by delivering more stellar results for the property market, particularly here in Scotland. It is no secret that the market has gone from strength to strength since business resumed at the end of June, and as we begin to reach the years end, there is cause for optimism that the going will remain good for the foreseeable.
Price Records and Swathes of Buyers
The key theme for October was continued house price growth that saw new listing asking prices up 1.1% on September, with new property listings averaging £323,580 which is a new national UK record, according to Rightmove. The UK’s leading property portal also reports that national house prices are now 5.5% higher than they were this time last year. Whilst those figures certainly make for pleasant reading, things are even stronger up here in Scotland with October bringing a staggering annual price increase of 8.7% (up 0.6% on September). Nationwide and Halifax both echoed these figures, with their own findings seeing prices for October now up 5.8% year on year.
There are a number of reasons as to why prices are growing so strongly and one of those is simply down to the sheer volume of active buyers, with 66% more people looking for a property now than this time last year. Rightmove also claim that traffic to their platform sits almost 50% up on October 2019, which is the biggest annual increase in traffic since 2006.
Buyers are most certainly racing to take advantage of the current cut to LBTT here in Scotland, with no land tax to be paid on the first £250,000 of a property. This incentive runs until Spring 2021, so it is reasonable to assume that buyers will continue to strive to take advantage until then which will continue to charge market performance into the new year.
The biggest record breaking stat for this October is arguably the most encouraging for the wider economy with completed sales up a sensational 70% on the same period last year.
Across the UK the average time to sell continues to fall as buyers furiously compete to purchase homes, the national average now sits at 50 days which is 12 days faster than in 2019. Scotland, however, once again leads the way with houses selling on average in just 31 days.
This time of the year, with nights drawing in and Christmas looming, we would expect to be seeing a slowing of the market. This year, as with most things in 2020, is a different story entirely with buyers looking to take advantage of low interest rates on mortgages and capitalise on the cut to LBTT. It is reasonable to predict that the property market will continue to perform above expectations as the trend of buyers looking to up-step to large homes – arguably driven by changing priorities on the back of lockdowns – looks set to to continue.
Encouragingly the UK Government has also promised it will continue to support low deposit mortgages for first time buyers whilst the Scottish Government has confirmed further investment to the tune of £50million for the First Home Fund, both of which should stimulate at the bottom-up driven movement in the market which would help facilitate the progress of second-steppers into larger homes.
With our own enquiries roughly two-thirds higher at this point than they were pre-lockdown, the backing of low mortgage rates, five months left of cuts to LBTT and further investment to support first time buyers, there is enough evidence to suggest there is plenty of fuel in the tank for the property market and that things will continue to push forward into the new year.
The introduction of Tier 4 restrictions to much of Greater Glasgow and the West of Scotland has caused many to look up and question if ‘that is it’ for the rest of the year, however we are delighted to report that the property market remains open, meaning; sales can progress, houses can continue to be listed and viewings – with dedicated health & safety policies in action – can take place.
As ever, we encourage both buyers and sellers to reach out and engage with us, each property has a different set of circumstances and a conversation with experienced professionals, who know your local market inside and out, will help you better understand your own position and is absolutely the best place to start.
Managing Partner’s Comment
“It is remarkable what a short term, forced restriction on civil liberty does to focus the mind and rearrange priorities.
The public have resoundingly reaffirmed their love affair with property and with an exaggerated period of intense scrutiny on their existing dwelling we have witnessed, many are redefining what “good looks like” and expressing themselves freely and often liberally in acquiring their ideal domain and associated amenities throughout the price and category spectrum.
This is the most genuine, sustained and dynamic change I have witnessed in over 34 years in property. The resounding desire to move home extends from first-time buyers right through to down sizers, picking up everyone else in the process. Greater square footage, dedicated outdoor space, a functional office and even access to nature have become prerequisites for many.
A strange quirk of fate perhaps but it really does appear that the enduring attractions of home ownership have been accentuated and galvanised by adversity and as a result the market is in a gloriously healthy state as a result.”
– John Kelly