With the new year now underway, we have taken some time to discuss our thoughts on the outlook of the property market in Ayrshire.
For the first time in two years, Scotland emerges into January with relatively little in the way of restrictions in place, schools and nurseries are open, and businesses can trade over the doorstep.
Despite the pressures the latest Omicron variant brings to our lives, if we compare where we are to this time last year, things are remarkably different. In January 2021, we were in a new year lockdown, most offices were closed, and parents were burdened with home schooling.
There can be no denying that the ‘lockdown’ scenario we faced this time last year had implications for the Scottish property market. This was particularly true when it came to the sale of family homes; after all, trying to coordinate selling your house whilst teaching maths to a couple of P7’s and simultaneously holding down your day job is no mean feat, that’s for sure.
Despite these challenges, the property market still reacted positively, and Scotland had an incredible year when it came to both house prices and the overall volume of sales recorded. To be more specific, the latest figures from the Registers of Scotland post an annual price increase of 11.3%. There’s even better news for Ayrshire-natives with the region outstripping the national average, as well-funded buyers from Glasgow, less impinged by the need to commute five days a week in the wake of ‘home working’, took advantage of the comparative bargain that can be had towards the coast versus the suburbs of Glasgow.
South Ayrshire saw house prices rise by 13.7%, putting nearly £20,000 on the asking price of homes versus the previous year. It was a similar story for North Ayrshire, where our Largs office witnessed an annual increase of 12.9% and even East Ayrshire, which has struggled in recent years for price growth, witnessing an incredible 14.4% spike in property parties, putting some £15,000 on where they were in 2021.
The key trend last year was Supply vs Demand and ultimately, that, combined with record low-interest rates and the great ‘race for space’ as buyers strived for a larger home with bigger gardens, is what drove house prices so much.
So, what does that mean for 2022?
You can never say that anything in the property market, particularly so in Scotland, is a sure thing. Still, there is certainly enough evidence to indicate that we will continue to see the strong form of last year carry through into 2022.
Let’s start with mortgages…
Interest rates on mortgages are one of the key metrics we always keep an eye on when it comes to trying to get a feel for where the market is going, and 2021 saw rates hit an all-time low amid the veracious home-buying that took place. Heading into 2022 there is a rise in the Bank of England base rate which will, and already has, seen mortgages go up – and to be honest, that was kind of inevitable given the economic recovery we are going through in the wake of the pandemic. The increase at present, a jump from 0.1% to 0.25%, is relatively marginal, and we wouldn’t expect it to have any meaningful impact on the immediate buyer appetite.
There are certainly silver linings to be had from the rate increase, however, as lenders work to combat the impact it may have. A number of lenders have already started to offer longer-term fixed rates, even allowing borrowers to fix for the life of the mortgage in some cases – Habito even launched a mortgage with a 40-year fix and no exit fees, and it is likely we will see larger high street lenders follow a similar path. Additionally, lenders are independently making moves to offer a larger loan-to-income ratio; Nationwide, for example, have increased theirs to 5.5 times a household salary, whilst others are going as high as seven times household salary.
And what about buyer trends?
We finished last year with Rightmove reporting that there were around 80% more buyers actively looking to move home, and that number is not going to be dropping anytime soon.
The same factors that motivated buyers last year are the same ones that will be motivating them this year; larger square footage, greater access to outdoor space, less emphasis on a daily commute and, of course, bang for your buck.
And all this plays beautifully into the prospects for the wider Ayrshire property market; after all, it was the crux behind the stellar performance of the region last year that saw house prices rise by nearly 15% and will be the crux again this year.
Ayrshire is blessed with rolling countryside to one side and Scotland’s stunning coast to the other. You are a stone’s throw from Glasgow, connected by road and rail. There is fantastic schooling and further education campuses. As for prices? Well, that speaks for itself – large family homes in and around Ayr are as much as 40% lower than their equivalent in the affluent suburbs of South and West Glasgow. It ticks every box for most modern home buyers and their aspirations.
Since June 2020, when we came out of the first lockdown, we have seen swathes of buyers take part in the grand exodus from city living in pursuit of a new style of living, and Ayrshire has benefitted from that more than any other is in Scotland.
We are confident that 2022 will be one of prosperity for those looking to sell their home, whilst it will also be a year of great optimism for those seeking a new life in a beautiful region.
For more information on what the market looks like, specific to your home and circumstances, book a complimentary appraisal with Corum today by clicking the button below.
