Monthly Scottish Property Market Update – January 2011

Property market outlook 2011 – are you going to lose money or make money?

Welcome to the first monthly property market update for 2011.  Now that the world appears to have returned to some semblance of normality after the temporary paralysis induced by the white-out of December and early January, we’re going to have a wee look forward to the rest of 2011 and what is likely to happen in the property market this year.  A lot of other people have been getting in on the act of predicting housing market movements for the coming year so we’ll have a wee look at what others are saying and then let you know what that actually means for you as someone who’s interested in property in Scotland.


This is just a quick newsflash to let you know about the ESPC’s Match Maker service which assists property sellers who are using ESPC to swap or part-exchange properties with each other.  There are currently 4500 properties advertised in the ESPC (for more information see and the ESPC weekly paper) through over 200 ESPC member solicitor firms.  MOV8 Real Estate is an ESPC member firm and can advertise all of its clients’ properties in this fantastic marketing tool.  ESPC is more than just a website and newspaper though and ESPC’s Match Maker is aimed at matching together ESPC sellers who might be looking for each other’s property.  Sellers’ solicitors register their client’s desired property with ESPC and, if two ESPC sellers appear to be looking for each other’s property, ESPC will flag this up to their solicitors to see if their clients might be interested in swapping or part-exchanging their properties.  It’s yet another reason to use a solicitor/estate agent who is an ESPC Member Firm if you are thinking of selling your own property.  For more details of this brand new and innovative service, please just drop us a line and we’ll take the next steps for you.

What is the data and what are the experts saying?

  • the number of mortgages approved for house buyers by the UK’s main banks fell by 10% in 2010 leaving the number of approvals at its lowest level in 11 years, apart from 2008;
  • The Council of Mortgage Lenders (CML) reported that the value all new mortgage lending, including remortgaging and equity withdrawal, fell to its lowest level for nine years in 2010;
  • HM Revenue & Customs said that the number of homes sold in the UK during 2010 stood at just 885,000, just over half of the peak recorded in 2006 and 2007 but 27,000 higher than 2009;
  • the CML estimates that in 2011, banks and building societies will have to repay about £130bn of the emergency borrowing they took from the Bank of England and the Treasury during the height of the credit crunch;
  • Nationwide’s chief economist, Martin Gahbauer, predicts that prices will decline gently for at least the first six months or so of 2011;
  • Halifax’s housing economist Martin Ellis thinks that house prices will be largely unchanged in 2011;
  • Simon Rubinsohn, RICS Chief Economist pointed out that the relationship between new buyer enquiries and new instructions in the RICS’s (Royal Institute of Chartered Surveyors’) monthly Housing Market Survey for December 2010 has demonstrated that for the first time since the end of 2009 the change in demand is greater than the change in supply. And when demand is going up relative to supply, this is usually a good indicator of stabilising or rising prices.

What has been our experience of the housing market thus far in 2011?

We are not exaggerating: we have never been busier than we have been so far in 2011.  We’ve been outspoken critics of people talking-up the market when all data and experience showed that property prices were falling and the market was crashing.  However, genuinely, we are very optimistic for the property market, in particular in the east of Scotland, in 2011.  Buyer enquiries are running at very high levels, new properties coming to the market are at levels we couldn’t have predicted for January (which is usually a quiet month), and we’re sitting today, a Monday, with offers pending on 8 different properties.

The most heartening things from the point of view of property sellers is that the types of properties that are selling is very varied.  Of the properties that have pending offers or that have sold in the past month, some are one bedroom flats, some are family homes, some in Edinburgh, some outside of Edinburgh.  In other words, the demand seems to be across the board.  In spite of bringing more properties to the market than we have in any previous November, December and January, our stock level isn’t rising very fast.  From a seller’s point of view, this is a very good sign that properties are selling: having a lot of properties on your books as an estate agent isn’t necessarily something to boast about!

We still hear all sorts of negativity emanating from other agents and our clients and potential clients are still telling us about all sorts of doom and gloom that they are being told by several other firms that work in the same geographic areas as us.  We’d like to think that this is simply because we are amazing at selling property and that nobody else can sell them as well as we can.  That is of course entirely true!  However, being serious we can’t be the only ones who are experiencing an upsurge in activity and it’s possible that a lot of the negativity that is spoken is simply a result of people becoming jaded over the last few years by a consistently ‘down’ market.

So what conclusions can we draw about the housing market and house prices in 2011?

We can only base these conclusions on our own experience, what we hear on the grapevine and on published statistics and trends.  However, based on all of this, the outlook for 2011 really does give cause for cautious optimism.

Lending levels are at a low.  However, they’re not significantly lower than they have been in the last two or three years, so the market has adjusted in the last few years to that level of mortgage lending.  The number of house sales has pretty much halved since the peak a few years ago, but transaction levels have been pretty stable for the past couple of years, so again the market has adjusted and stabilised at this level.  Demand seems to be at about the same level as supply and, as the RICS December 2010 figures suggest, demand even might be going up slightly compared to supply, leading to stable property prices.

Of course, cynics would suggest that ‘stable’ is another word for ‘stagnant’.  However, I think if you offered most home owners a year of ‘stable’/’stagnant’ prices rather than ‘volatile’/’unpredictable’/’spiking’ property prices, then after the last few years of uncertainty and negative equity, most home owners would chose peace of mind and stability for the coming year.  Our experience and the data all support this prediction.

We would suggest that, if you are thinking of selling your property in 2011 and are realistic about the asking price, you can be cautiously optimistic that it should sell and that it will sell for the valuation price.  In spite of the RICS figures, our experience is certainly that supply still outstrips demand, so there will always be properties that go on the market and that don’t sell.  Demand remains higher for family homes than for ‘starter flats’ and properties that are not maintained to a high standard will struggle to sell.

If you are thinking of buying, the flip side of all of this remains good news.  Demand is steady but not ridiculously high for the nice properties on the market so, if you are looking to pick up another property after selling, you should be able to pick up a nice one without getting involved in an auction with another ten buyers.

All of which adds up to a relatively stable outlook and cause for some optimism for the coming year.  And, for once, I can be a positive voice instead of a harbinger of doom at the beginning of a calendar year.  Nice!


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