Property Market Update January 2018

It feels like only yesterday that we returned to work after New Year and yet, within a short few weeks, if you believe what you read in the Press it’s never been a better time to buy a home or, alternatively, it’s housing market armageddon and you’re best steering clear. Amid the conflicting reports, hopefully this month’s Property Market Update will provide some clarity!

Prices are Going Up…or Down…Depending What You Read 

A report released by UK mortgage lender, Halifax, in early January 2018 revealed the areas in the UK where house prices had risen the fastest in 2017. Top of the pile were the East Midlands and Wales where house prices went up by 8% in the year. London rose by just 1%, the lowest annual increase in 6 years. At the other end of the scale, Northern Ireland dropped by 5.6%. Scotland, as a whole, fell by 0.2% in 2017 according to Halifax.

Halifax has a good PR machine and its reports get a lot of Press coverage. However, Halifax’s statistics are drawn only from property transactions involving a Halifax mortgage, so they aren’t representative of the entire market. The articles that quote Halifax statistics tend not to highlight this sort of ‘minor detail’ though.

By contrast, the UK Government’s House Price Index for November 2017, published in January 2018, reported that the average price of a property in Scotland was £145,992 and that the average price of a property in Scotland, annually, had risen by 3.6%. Given that this draws from all property registration data, not only is it far more likely to be accurate than the Halifax report but it’s also far more positive news for homeowners or landlords.

According to the ESPC, the average selling price of properties in east central Scotland increased by 6.2% in 2017, when compared with the year before. The average selling price in Edinburgh increased by 7.0% to £248,384 year-on-year.

According to the UK Government House Price Index, City of Glasgow homeowners also enjoyed a 6% increase in house prices in November 2017, when compared to the year before.

In a market characterised by a shortage of properties coming to the market, prices remain strong. This is the picture that we would anticipate continuing throughout 2018. Whilst some commentators will point at the potential harmful effect on the housing market of Brexit, Trump or other wider global factors, such uncertainty has long been on the radar of anyone buying a home and, to date, it doesn’t seem materially to have dampened people’s enthusiasm for home ownership.

As long as mortgage availability and affordability remain good, there seems no reason to doubt that the House Price Index rather than the Halifax report is the best barometer of what is really happening in the Scottish property market at the moment. And, on the note of mortgage availability…

Mortgage Lending Drops for a Month, Reports of Property Market Armageddon Ensue

A report by UK Finance has indicated that the number of mortgages handed out by UK banks was at its lowest level in five years, when looking at December 2017. The number of mortgage approvals in December 2017 was the lowest number since April 2013.

The report contained suggestions that the Bank of England’s decision to increase the ‘base rate’ by 0.25% had contributed to this. It does seem unlikely that such a modest increase would have a significant effect on the number of people applying for mortgages, particularly as the increase in the cost of repayments for the average borrower in the UK would be just over £10 per month. When you consider that the recent increase to the current ‘base rate’ actually returned it to the same level as late 2016 and you see that significantly more mortgages were approved in late 2016 than in April 2013 or December 2017, it’s difficult to draw the conclusion that the modest increase to the ‘base rate’ has caused the drop in the number of approvals in December 2017.

From our own point of view, December was a quieter month than it has been in years gone by. We saw a marked drop-off in requests for viewings in the week before Christmas, a week that has traditionally been very busy. Indeed, coming into 2018, we saw a sluggish start in the first full week after New Year, contrary to the pattern that we have seen in the past few years. However, from the second full week of January onwards the market has more than made up for it. We have booked a record numbers of viewings for the second half of January and are seeing a significant increase in the number of purchase transactions that our Conveyancing Department is handling.

Inexplicable behavioural changes do happen from time to time in the market. For whatever reason, it simply appears that people knocked-off a bit early for Christmas last year and then took their time to get back into gear after New Year.

From where we are sitting, it’s very much business as usual. Anecdotally, the local property market feels significantly busier this time in 2018 than it did at the same time last year. So, if you’re wanting to take advantage of excellent selling conditions, it’s a great time to be getting in touch with us!

We’re Here to Help

If you are thinking of selling your home or investment property in 2018, get in touch with us by calling 0345 646 0208 (Option 1) or by emailing [email protected] to organise a free valuation of your home or to get a full, transparent breakdown of the costs of selling your home.

You can also now instantly book a free valuation appointment, online, by following this link.


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