Scotland Continues to Buck UK Housing Market Trends
With Brexit negotiations continuing to hit the headlines, any impact on the housing market doesn’t seem to have dampened people’s enthusiasm for home ownership in east central Scotland. There has been a further increase in the number of properties coming to market compared to last year, which is encouraging for buyers, and average selling prices continue to increase steadily.
According to the ESPC, in August 2018 there was a 5% increase annually in the number of properties brought to market, while in the July and June House Price reports, this figure was 3.4% and 3.2% respectively. Average selling prices rose by 3.4% to £248,092 across east central Scotland, compared to the same period last year. The average selling price in Edinburgh rose by 4.5% to £268,151. The number of properties sold in east central Scotland between June and August 2018 decreased by 5.7% annually, however this is due to fewer properties being brought to market in previous months and is not indicative of falling buyer demand. The median time to sell across east central Scotland was one day slower than last year, with half of all properties going under offer within 18 days. In Edinburgh, the median time to sell was 16 days, which is one day slower than last year.
With regard to the overall UK housing market, the August 2018 RICS Residential Market Survey shows a diverse regional picture with the market solid in many parts of the country including Scotland. While London, parts of the wider South East, and to some extent, East Anglia are “downbeat”, Scotland and Northern Ireland in particular are showing “a healthy market, with a positive outlook for sales activity.”
RICS chief economist, Simon Rubinsohn, commented: “It is clearly very difficult to talk about the housing market at the moment without being acutely aware of the marked differences in trends across the UK. While a combination of a lack of stock and some level of uncertainty, both relating to the interest rate outlook and Brexit, has had an impact on activity, the overall picture in these areas is still encouraging. The story in London and the South East is, as has been widely recognised, rather more challenging but it is important that this is not seen as being indicative of the wider market.”
Increase in Mortgage Approvals
New data from chartered surveyors, e.surv, shows that mortgage approvals in the UK increased by 2.7% in August 2018 compared with the previous month, but were down by 0.7% compared to August 2017. Overall, there were 66,543 mortgages approved during August 2018. The proportion of mortgages approved to borrowers with small deposits, including many first time buyers, increased to 22.8% from 22.1% in July.
According to e.surv, the recent Bank of England interest rate rise may have prompted increased levels of activity as home borrowers try to lock in a low fixed rate deal while borrowing is still relatively cheap. All of this is good news for property sellers and potential property sellers as the availability of finance has a direct impact on demand, time to sell and house prices.
From Our Point of View
In Edinburgh and the Lothians we noticed a slowing of activity in August compared with previous months. A combination of unusually good weather, school holidays and then the local schools going back undoubtedly had an effect, as they do every year (with the exception of the good weather!). However we saw activity levels returning to healthy and normal levels in early September with buyer demand far outstripping supply of properties coming to the market and we expect to see a very strong last few months of the year.
The second half of September 2018, in particular, has seen a huge increase in the number of properties coming to the market versus August. Whilst the number of properties coming to the market in December will naturally drop, as it does every year, we anticipate a very strong October and November with a huge amount of pent-up buyer demand just waiting to take advantage of sellers bringing their properties to the market in this time.
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