As results for the final quarter of last year continue to trickle in, it’s clear that Glasgow was the big story of 2017 for property sales and prices.
Scotland’s largest city saw the second highest rate of growth in the UK behind London with its residential housing stock now worth a combined £90.75billion, compared with £68.27billion in Edinburgh.
The average home in Scotland has increased by £6,000, in the 12-months to March 2018, with the average house price now standing at £175,882.
Experts say it’s Glasgow that’s driving the growth, with sales exceeding £500million for the past two consecutive quarters.
East Renfrewshire - home to the in-demand areas of Giffnock, Clarkston, Netherlee and Newton Mearns which have some of Scotland’s highest performing state schools - emerged as Scotland’s most expensive place to buy a property, with the latest figures showing the average house price there is now worth £260,158.
East Dunbartonshire, which includes the popular suburbs of Bearsden and Milngavie, also saw a surge, with average property prices rising to almost match those of the Capital.
The trend is confirmed in a report published this month by the Royal Institution of Chartered Surveyors (RICS) which said that 28% more surveyors have reported prices rises since the start of January than those who said they fell.
Considering regional variations and the fact that supply of properties coming to the market remains a concern, the mood remains generally upbeat.
However, lurking in the shadows is the now familiarly haunting figure of the Land and Buildings Transaction Tax (LBTT), which continues to represent an unwelcome ghost at the feast.
Throughout 2017 the property tax – a progressive charge of up to 12% on the most expensive properties, introduced as by the Scottish Government in 2015 as a replacement for stamp duty – had a deadening effect, particularly at the top end of the market, on homes worth more than £750,000.
Another feature of the tax, an additional 3% charge on second homes, is now said to be driving some landlords from the market, as is the prospect of Westminster’s planned move towards a staged withdrawal of relief on mortgage payments.
Since April 2016, buyers who already own property have had to pay the 3% Additional Dwelling Supplement (ADS) on top of the LBTT due on their purchase.
Meanwhile, the UK Government has begun withdrawal of a relief which allows higher-rate taxpayers to offset their buy-to-let mortgage interest payments against their tax bills.
It has also become harder to secure a buy-to-let mortgage due to more stringent underwriting rules for portfolio landlords.
According to one reputable report, the ADS has already led to almost two-thirds of homeowners being put off investing in buy-to-let properties while some current landlords are moving to sell-off their properties.
Landlords are a significant buying force in the Scottish property market and they are clearly being squeezed by measures from Holyrood and Westminster.
Fortunately, there’s enough residual demand in Glasgow for owner occupiers to take up the slack but in other, more provincial areas, we might begin to see those taxes having a real impact on sales.
Many people will agree with the principle of encouraging owner occupiers, particularly first-time buyers, and would welcome measures aimed at encouraging lower house prices and a more sustainable Scottish housing market.
However as with many government measures, there are unanticipated consequences and consideration must be given to how they affect the rental market in the medium-to-long term.
If there are fewer landlords and fewer rental properties, then inevitably we will start to see average rents rising and no-one wants to see that.
It’s been a hard year for ‘traditional’ estate agents, what with Brexit, business rate hikes, high property tax rates and uncertainty over a possible second independence referendum.
With the number of so-called ‘online’ estate agencies doubling in the past 12 months, more agents are competing for fewer sales, with sellers willing to pay less in commission.
It’s no wonder my former colleagues are looking ever more depressed behind the windows of their high street offices. Some believe they’re in a traditional property slump and all they have to do is hold their nerve, sit it out and wait for the good times to start rolling again.
But will they? I’m not so sure.
For a start, we don’t appear to be in a slump – not judging by the prices being paid for some mid-range properties in certain areas of Glasgow and Edinburgh.
While the higher end of the property market does appear to have hit the buffers - due largely to Land and Buildings Transaction Tax (LBTT) bands being set at the wrong level – elsewhere, we’re seeing buyers prepared to pay near record levels for homes. We’ve seen it in the West End and the southside of Glasgow and in the east end of Edinburgh which is undergoing something of a property price boom.
This price inflation might possibly be caused, once again by the effects of the LBTT with buyers preferring to pay over-the-odds for mid-range properties rather than purchasing at the top end of the market and handing a massive tax premium to Nicola Sturgeon.
Elsewhere, we’ve seen the impact on prices that having a high performing state school can have in certain areas. With private school rolls at their lowest level for 30 years, more people appear willing to pay a premium for bricks and mortar to ensure their kids get into the right school.
With property prices rocketing in the catchments of state secondaries like Williamwood and St Ninian’s high schools in East Renfrewshire, Jordanhill, in Glasgow, Cults Academy in Aberdeen and Boroughmuir and James Gillespie high schools in Edinburgh, we estimate it won’t be long before buyers are paying a ‘schools premium’ of more than £200,000 in some locales.
Elsewhere prices appear to be holding up and the much anticipated Brexit bite doesn’t appear to have materialised – not yet anyway. Who would have confidently predicted, 18 months ago that Scottish property values would be rising faster than London’s – a trend Savills predicts will continue until 2022?
That’s not to say Brexit won’t eventually bring the walls crashing down on the property sales market and it would be brave or foolish to ignore warning signs of prognosticators like the Royal Institution of Chartered Surveyors who, in the summer, suggested the housing market had weakened.
Nor the most recent economic outlook by PwC which reported that both the Scottish economy and the housing market had taken a hit because of lower business investment and weak consumer confidence caused by uncertainty over Brexit.
So where does that leave the baffled consumer and indeed the property sales industry? While everyone’s situation is different and we should all take professional financial advice before parting with our hard earned readies, property remains a relatively sound investment.
There are all sorts of myths about when is the best time to sell and each neighbourhood and home is different. Seasonal variations are fairly universal but it’s worth having a close look at your local area before entering the market.
Winter can be a difficult time to sell, especially before Christmas. If you’re not ready to put your home on the market before December, it’s probably worth waiting until January when people are starting to think about the year ahead
It seems the government is finally taking the plight of first time buyers seriously and helping Generation Rent finally to gain a foothold on the property ladder. In his budget last week, the Chancellor effectively scrapped stamp duty on properties worth £300,000 or less for the rest of the UK.
The First Minister has signalled she may be willing to offer similar help to first time buyers in Scotland although, given lower absolute property prices, the threshold will be lower north of the border.
As for my former high street colleagues, what does the future hold for them? At Walker Wylie, we describe ourselves as a ‘hybrid estate agency’, offering the same full service as a high street agency but at online prices.
Increasingly, however, the titles are irrelevant. Every agency is an online agency and, if it’s not, it shouldn’t be trading. At heart, we’re all just estate agencies, pure and simple, and the only difference between us is our value proposition – what services do we offer and what do we charge?
In the end only those that offer a highly professional, dedicated and local service will survive and the agencies that prosper will be those that offer the best value for money.
It’s often said that, if there are two economists in a room, there will be three different predictions and it seems estate agents are becoming a bit like that.
With so many different political and economic factors potentially impacting on the housing market, it's almost impossible to find a consensus on which way it’s likely to move.
Every week brings a new report, opinion or set of figures that seems to contradict the last and the only certainty appears to be that things will change, one way or another.
Brexit has failed to have the dampening effect many predicted but, as Nick Marr, co-founder of TheHouseShop.com, points out, we’re still at a very early stage in the process and, much talk aside, nothing has actually happened yet.
According to Richard Blanco, a professional landlord and property investor, uncertainty around Brexit, the economy and the government’s policy towards housing means we may actually be in the middle of a purple patch, an ideal time to try to snap up a bargain.
Construction remains one of the stronger performing sectors north of the border, according to the Scottish Chambers of Commerce quarterly economic report, published this week, which predicts the country’s economy will continue to grow this year, despite potential challenges ahead.
That optimism was mirrored by the latest Halifax First Time Buyer Review which said Scotland remains the most affordable place in the UK for first time buyers.
Stirling topped the list as the best area for prospective buyers to take their first step on the property ladder, it said, closely followed by Inverclyde and Renfrewshire, with West Dunbartonshire, East and North Ayrshire and North Lanarkshire also featuring prominently.
The average price paid by first time buyers north of the border is £139,041, compared with an average price of £207,693 across the UK. The average deposit paid is £21,565 compared with £32,899 nationally.
London remains the most expensive part of the UK with first-time buyers typically requiring a deposit of £106,577 or 26% of the average price of a home.
Statistics published by estate agent Knight Frank, showed that while the property market remains price sensitive, demand for more expensive properties is on the rise.
Its latest index reveals a 7.6% rise in the number of new buyers registering to purchase Scottish country houses in the first six months of this year, compared with the same period in 2016.
As a result, the prime property market looks increasingly good value while the lack of price growth momentum shows that buyers are prepared to shop around.
The agency points out that political and economic uncertainty have checked growth, which brings us on to the second piece of news, a warning by property experts that the full impact of Brexit has yet to be felt in the housing market.
You pays your money and you takes your chance. If you’re thinking of buying or selling, the smart money appears to be on taking the plunge now while interest rates, unemployment and inflation are all relatively low. If history has taught us anything, it’s that these things can change quickly. Just ask any economist.
The Glasgow property market continues to perform robustly, with many more buyers than available properties, so in that respect it’s a good time for sellers. We recently arranged more than 60 viewings for a one bedroom flat on Shaftesbury Street, Anderston suggesting that many more first time buyers may now be re-entering the market.
Within a week we had set a closing date and achieved a record sale for the building. Prospective buyers tell us time and again that there isn’t enough stock out there with many frustrated at the number of properties they have viewed going to a closing date and selling for well in excess of the Home Report value. While that’s great news for sellers, it’s not so great when they then have to buy a property and they come up against the same problems.
That has led to people taking more time to deliberate over whether they should sell or buy first. Homeowners are wary of placing their properties on the market, knowing that they are likely to selling within a couple of weeks, putting them under pressure to find a new home. Unless you’re able to negotiate a long future handover date, you run the risk of having to rent and even to pay for storage until you find a suitable property. Those who decide to buy first may find themselves having to secure bridging capital if they fail to sell their home quickly enough.
In our experience there’s no ideal solution; while some people feel the best option is to sell first so that they’re in a strong position when it comes buying another property, many others prefer to have secured a property before deciding to sell.
Brexit continues to occupy people’s thoughts when they’re thinking about buying or selling but the good news is that it doesn’t appear to have had any appreciable impact on the property market. While it may feature in discussions, property sales figures since last June suggest that it’s not influencing people’s decisions either way. Despite widespread media coverage, the market has continued to perform well both in Glasgow and Scotland as a whole. It’s still an evolving situation – Article 50 has not yet been triggered and there will, inevitably, be further twists and turns in the story as we move ever closer to the UK withdrawing from the EU.
The influence of online selling in the property market continues apace. Outdated high street estate agencies are losing an increasing share of the business to hybrid businesses like Walker Wylie as customers vote with their feet. In the first of a series of monthly reports on the UK property market, Credit Suisse said that online agents were out-performing the high street in growing the number of sales. We recently sold a property in East Renfrewshire which has Scotland’s highest performing state schools and where property is in hot demand. The seller received quotes from all of the local estate agents and was astonished at the potential costs which, in virtually every case, amounted to more than £5000 + VAT. He was surprised when we said we would offer the same service as the high street agencies but at a fraction of the cost – just £894 – but he decided to place his faith in us. We’re delighted to say that we sold the property in less than 2 weeks at a closing date and for a price that was a new record for the street.
Spring is in the air as we approach what is regarded by the industry as the best time of the year to sell your property. Our advice to people thinking of selling is to speak to an estate agent and to get your property on the market ahead of the Easter break. Remember that around 98% of people buy a property after seeing it online and a lot of browsing is generally done while they’re on holiday.
Welcome to Walker Wylie’s quarterly review which is designed to provide both buyers and sellers with a condensed overview of the prevailing market conditions within Glasgow.
Having just launched our new exciting business in June of this year, July through to September represents our first full quarter of trading. It has certainly been an eventful period and incredibly satisfying to receive such a fantastic response to our new business which is designed to provides sellers with an alternative approach to selling their home.
To such an extent, between July and September we listed 28 properties. This resulted in 24 recorded sales with an average selling price of £186,000. Of which, 35% were derived via closing dates and all were achieved within an average selling period of a mere 26 days.
Our firstly quarterly figures exceeded our projections and further endorsed our belief that there is indeed an appetite for our alternative ‘Hybrid’ approach and clearly demonstrates we have the experience and platform to achieve fantastic results for our clients.
In particular, two specific recorded sales provide further evidence that we can match, and indeed surpass, the results obtained from the traditional high street approach. Namely, a delightful two bedroom semi villa in Kelvindale which was listed at offers over £239,000, attracted 30 viewings within 2 weeks and sold at closing for £45,000 in excess of the stated Home Report valuation. Secondly, an expansive five apartment town flat in Queens Park which secured 17 viewers within 10 days and achieved a sale price considerably in the excess of the Home Buyers valuation, which at the time, represented a record sale price for the street.
While the before mentioned figures are representative of a new businesses first quarter trading, they clearly follow the same imbalance between supply and demand which has consistently dominated market conditions over the past 2 years. With 10 year’s experience in the local market I can't recall a period in time when this imbalance has been so pronounced. Therefore, at present, the market certainly favours sellers, especially those offering impeccably presented properties in sought after locations. And this growing imbalance presents a wonderful opportunity for would be sellers to achieve a successful sale on their terms.
Demand levels have continued to increase and this is notable throughout all levels of the market. In particular we have experienced continued success within the following categories. Traditional tenement flats within the £125,000 to 350,000 price range are performing robustly. To such a point we have recently achieved record breaking prices which have even surpassed the dizzy heights of 2007. Again, impeccable presentation is essential as buyers remain discerning, but for those offering a quality finish, especially in preferred streets, excellent rewards await.
In addition, mid-range family homes within the £200,000 to £450,000 range are selling exceptionally well with closing dates now regarded the norm rather than the exception. This is indeed very encouraging for those contemplating the sale of a sandstone terrace, villa or conversion as we are currently oversubscribed with buyers, many of whom were unsuccessful at previous closing dates. The upper level of the marketplace, ranging from £500,000 to £750,000, has remained patchy over the past 5 years and recent changes to the LBTT rates have cast an additional degree of uncertainty within this price band.
Such an overwhelmingly positive outlook is in stark contrast to the post Brexit scare stories. Rather surprisingly, the effects of Brexit have not been felt anywhere near the extent forecasted and predicted. We believe the timing of the result was crucial as it was in line with the seasonal summer slowdown and the media reporting was somewhat restraint and not overly negative.
Granted, we have noted a slight pause within the market as both buyers and sellers take stock. However, the ‘life must go on’ mantra has taken hold and properties are continuing to sell. Since the start of the year we witnessed the reemergence of ‘crazy prices’ being obtained well in the excess of Home Reports values which were predominately fueled by the growing sense of competition between buyers. Based on post Brexit sales, we would suggest the market has at worse, calmed slightly, rather than contracted.
And for those contemplating selling this Autumn …. contact our office at you earliest convenience, which will allow us to first evaluate, then advise on the correct marketing strategy to ensure we achieve the maximum sale price for your home.
Welcome to Walker Wylie’s first quarterly Market Review. We hope you find the information detailed to be both interesting and informative.
The housing market in Glasgow continues to perform strongly as buyers seem more purposeful in their approach to finding a new home. It is great to see this enthusiasm as it is from all types of purchasers, be it first time buyers, parents looking to buy for sons or daughters going to University or people just taking another step on the property ladder. First time buyers in particular have been extremely active, it would appear that many of them who have been trying to squirrel away as much cash as possible to increase their deposits, now have their money in place and are raring to go.
Lack of stock has been an issue for some time now and it looks very much like this trend is set to continue. With demand outweighing the supply of new properties coming onto the market, a significant proportion of properties are selling at closing dates within a couple of weeks of being listed and in most cases see in excess of 20 viewers. Buyers are once again readily competing for premium property and The Home Report is no longer a ‘ceiling' as an increasing number of properties are achieving well above the Home Report value.
Traditional tenement flats within the £125,000 to £250,000 price range continue to attract significant interest, whilst the amount of buyers looking to purchase three and four bedroom conversions is ever increasing. Furthermore, we are seeing unprecedented demand for sub £225,000 family homes, where recent sales prices and turnaround times have been very encouraging. Impeccable presentation is essential as buyers remain discerning, but for those offering a quality finish, especially in preferred streets, excellent rewards await. In addition, mid-range family homes within the £225,000 to £400,000 range are selling exceptionally well with closing dates now regarded as the norm rather than the exception.
The upper level of the marketplace, ranging from £500,000 to £750,000, has remained patchy over the past 5 years. However, we are now starting to see a marked improvement at the higher end as increased mid-range activity has now begun to filter up.
The marketing and presentation of a property is so important and can make all the difference to that final selling price. Photography is such a key element when it comes to fully showing off all the best features of a property. With over 95% of enquiries coming through the internet, it means the first thing people see are the photographs taken by the agent. This is why when selling with Walker Wylie, only a Director with training and state of the art equipment will photograph your property for sale. The commitment we place on the quality of our marketing and advertising, along with cutting edge HD Movies, ensure that nobody is better placed to present a property to the market.
At Walker Wylie we believe that house prices will continue to rise throughout the remainder of 2016, however we could see the more popular properties such as traditional tenement flats and three and four bedroom conversions in the more sought after locations achieve even higher uplifts, due to increasing demand and a continued lack of stock.
One thing for certain however, is that right now is a great time to be thinking of buying or selling your next home. Therefore, if you need any assistance or advice with buying or selling, or you want to find out more about Glasgow’s newest and most exciting hybrid estate agency, call or email our office any day of the week.