November Property Market Update

Property Market Highlights

  • Scottish house prices continue to rise despite ongoing economic uncertainty
  • Strong buyer interest continues
  • Properties attaining 108.4% of their Home Report valuations at sale
  • The median time properties are on the market just 14 days

Interest Rates Set to Peak as Property Market Experiences Slowdown

It’s been hard to escape the news in the past few weeks about the impact of former Chancellor Kwasi Kwarteng’s mini-budget last month. That led to a period of mortgage rates dramatically rising. We saw the Bank of England last week raise its “base” rate by 0.75% and saw reports from Nationwide that UK house prices have fallen for the first time in 15 months. What is the impact of all of this on the Scottish property market and what it mean for property buyers and sellers?

The Bank of England indicated last week that economists’ predictions about future interest rate rises were over-cooked. This was seemingly aimed at mortgage lenders who have “priced-in” these predicted rises to their 2, 5 and 10 year fixed mortgage rates. Whilst nobody expects to return to the low-interest rate environment we have been in for the past few years, there is now an end in sight for interest rate rises and a clear indication from the Bank of England that interest rates don’t have far too rise from now. Equally, they are unlikely to fall in the next couple of years. This has resulted in some mortgage lenders offering slightly better fixed rates than those that were available just a couple of weeks ago. Many commentators have pointed-out that mortgage interest rates are currently on a par with historic rates and that this is not so much a “new normal” as a “return to normal”.

I expect to see Scottish property prices cooling. This is likely to be seen most obviously, and quickly, in the premium over Home Report valuation dropping (in other words, the amount that buyers are prepared to pay in addition to a Chartered Surveyor’s valuation). This will likely be reported as a drop in house prices, which looks bad. However, it’s a drop from an extraordinary high. Anyone who has experienced the dramatic property price growth in the past couple of years will still get a good return on their investment. And, for anyone looking to move home, they will experience the same conditions on their onward purchase, meaning that the “cost to change” is unaffected.

Most statistics are pointing to levels of concrete buyer interest cooling. At the coalface, that’s certainly what we are seeing. Viewing request numbers are higher than ever, indicating that buyers are still very much interested. However, the number of offers that we have received in the last few weeks has definitely dropped. It seems that some buyers are sitting back and waiting to see what happens with interest rates and house prices before making the leap. However, after a period of exceptional growth driven by low interest rates and post-Covid pandemic demand, we are returning to normal rather than embracing a new normal. I have said it before, and it bears saying again, you don’t need 40 notes of interest and 25 offers at a closing date to sell a property for a good price. 

The biggest challenge we will have over the next few weeks and months will be managing buyers’ and sellers’ price expectations. Buyers will read some reports that property prices are going to fall from their peak by around 5% to 10%. Sellers see stats saying that prices are rising, albeit that might be based on transactions that were underway before the mini-budget turmoil. And everyone wants to believe the story that most benefits them!

That’s why, if you’re thinking of selling in a market like this, you need an excellent estate agent who understands how to market a property for sale in a more challenging market. Good pricing tactics, the timing of pricing reviews, managing buyers’ expectations and sellers’ expectations on price, using additional advertising products and tactics such as “virtual staging”and virtual tours should all be part of an agent’s toolkit. Agents who for the past decade have put up a For Sale Board and waited for offers to flood-in are not cut-out for the current market conditions. Thankfully, our team has been through the 2008-09 crash and thrived on the other side of it, so we are well-placed to help any seller or buyer in the current market conditions.

Scottish House Prices Continue to Rise Despite Ongoing Economic Uncertainty

Despite everything that has happened in the past few weeks, the Scottish property market remains strong and, as ESPC predicts, is unlikely to experience many immediate changes. On the contrary, despite ongoing economic uncertainty, house prices in Edinburgh, the Lothians, Fife and the Borders increased by 9.4% between July to September 2022 – reaching an average of £299,649 and suggesting demand across the property market continues to thrive. 

Houses in West Lothian enjoyed the most significant price increase, hitting £248,871 – an average of 19.8%. With hybrid and home-working continuing to rise, buyer demand has steadily increased in the area as more people seek larger homes at more affordable prices within commuting distance to the capital. 

Next up, West Fife and Kinross saw an average selling price of £229,547 – 13.9% higher year-on-year. Dunfermline properties, on the other hand, increased 11.7% – hitting £221,640 annually, while Edinburgh saw the lowest average price increase of 9.6%, with an average annual selling price of £317,997.

It should of course be noted, cautiously, that much of this activity was before news of dramatic interest rate and mortgage rate rises. However, reports of the property market’s demise are perhaps premature!

Properties Continue to Attain Above Their Home Report Valuations at Sale

ESPC reports that Scottish properties, on average, attained 108.4% of their Home Report value at sale between July to September this year – 2% higher than the same period in 2021.

Properties in East Lothian attained the most over the home report, with homes selling for 111.1% of their valuations on average – 0.5% higher than last year. Next was West Fife and Kinross, where properties attained 108.7% above the Home Report valuation – a 1.7% increase compared to 2021.

Unsurprisingly Edinburgh continued to be a popular and competitive place to buy, with properties in the capital attaining 108.1% of their Home Report valuations at sale – a 2.5% increase compared to last year. 

The same note of caution about the timing of these stats, prior to the glut of bad news in the Press in the past few weeks, needs to be made.

Properties On The Market for Median Time of Just Fourteen Days

Buyers continue to face intense competition in the Scottish property market, with homes persistently being snapped up fast. Between July and September this year, the median time for properties to go under offer was just 14 days – a similar figure for the same period last year but a slight decrease compared to the previous few months, which saw an average of 11 days on the market.West Fife and Kinross properties sold the quickest at an average time of only 11 days on the market. In East Lothian and Midlothian, the average was 13 days. In the nation’s capital, homes sold in 14 days or less, but properties in the popular area of Leith were bought within an impressive 9 days on average. 

Thinking of Selling Your Property?

Fill in our free online home valuation form here 

Call us on 0345 646 0208 (Option 1)

or email [email protected] to organise a free valuation of your home or to get a full, transparent breakdown of the costs of selling your home.

Thinking of Buying?

Get a quote for buying online here

Call us on 0345 646 0208 (Option 2)

or email [email protected], and we’ll be happy to help.


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