What's Really Going On In The Edinburgh Property Market?
By Richard Loudon, Partner
The last few months have been fascinating with regard to the dynamics of the property market. Activity seems to change from week to week – one week frantically busy and the next week – noticeably quieter. Across the year, 2011 sales have been very slightly down when compared to 2010, however, late summer activity in August was noticeably ahead of 2010. Having said that, the first 2 weeks of September were weak but the second half of the month showed a noticeable uplift in £s of property sold.
There is, however, no doubt that property prices in the Capital have softened slightly over the year; our belief is 3-5%. It may be that this downward trend continues but it is equally likely that prices will level off as rental costs rise and more buyers come back to the market.
Most significantly “quality counts” both in location and presentation. The very best properties in each sector of the market are still very sought after with closing dates being set and some properties achieving in excess of the Home Report value. Certain sectors remain very strong - properties that are ideal for downsizers, particularly if they have a garden or balcony, and also upper/mid range family houses with sunny gardens as many young couples appear to have been in rented accommodation or top floor flats for longer than they would wish!
Lenders are still a problem – they are putting up a variety of hurdles to limit lending and the worth of Home Reports remains questionable. In many cases lenders are now insisting on having their own valuation carried out which means that we appear to be going back to the days of multiple surveys. One of the aims of Home Reports was to do away with multiple surveys but lenders seem to be finding excuses to instruct their own valuations and drive business towards corporates with the cost of a second survey having to be paid by the purchaser/borrower.
What of the next few months?
There is no doubt the market will remain tough for sellers except for the very best properties. We are fortunate that many owners of the best properties seem to want us to act for them in their sale because people who care about their homes care about how they are marketed. At the end of the day, any commodity will sell in any market providing the price is right. If sellers are willing to accept the price the market will pay for their property, they can sell and move on.
If you are moving up market prices are relative. Whilst you may have to accept less than you would have wished for your own property, you are also likely to pay less than you previously would have for your new property. The differential between the two (i.e. the money you have to find) will be proportionately less so you will be better off. Hence a reduction in property prices is not a bad thing for everybody. We are very happy to explain market dynamics to any seller or buyer, please just phone us for advice.