By Robert Carroll
Managing Director of MOV8 Real Estate
Estate agents in Edinburgh and the Lothians are reporting a ‘property drought’ for the first time in years. We’ve seen the proportion of properties being sold each month increase significantly, causing depleted stocks and a shortage of good properties being available for property buyers.
In our own experience, we’re seeing quality houses flying off the shelves. Family homes are always popular so larger properties in good areas are still attracting multiple offers and often achieving more than the Home Report value. We are also finding that many of our sellers are becoming far more realistic about pricing. If things continue this way we will very soon end up in a position where we have nothing to sell!
The appetite of buyers also seems to be increasing as a result of improved mortgage lending conditions; they seem to have more confidence that the worst of the poor property market conditions, witnessed in the past few years, is over. In the past three months, we have sold considerably more properties than we’ve put on the market. However, while the number of properties being sold has gone up, the number of new properties coming on to the market has remained fairly steady. As a result, we had 40% fewer properties available at the beginning of February than at the end of October.
Other firms share our view. Richard Loudon of Simpson & Marwick told us that they had sold a higher proportion of their properties in January 2013 than in 2012. “Statistics,” he said, “back up the fact that more properties are selling now and we believe that that is because sellers of the slightly less sought after properties are being more realistic about the price that they will accept.”
At MOV8, we believe that the bad weather at the beginning of the year had a large part to play in people deciding not to bring their property to the market, even though buyers are returning. It’s a view shared by David Marshall (below), spokesman for the ESPC, who told us that the statistics are there to back it up.
“Over the last three months,” he explained, “sales in Edinburgh have risen by 9% annually whilst the number of homes coming onto the market has remained relatively unchanged. Total sales during the last three months of 2012 were at their highest level for the fourth quarter since 2007. This increase in sales has been helped by sellers showing an increasing willingness to negotiate on price.”
As with all markets, supply and demand affects pricing. If demand continues to outweigh supply, with buyers having more desire to buy properties than sellers have confidence in their properties’ abilities to sell for the prices that they want, it could cause a shortage of quality properties. This could start to drive prices up again, particularly in types of properties or areas where there is limited supply and high demand such as the market for good family homes.
The good news for the market more generally is that we’re seeing far more First Time Buyers coming in. So as well as the perennially-popular family homes, more new buyers are snapping up great deals on less expensive properties too. Finally, we’re also seeing a return of property investors to the market.
With mortgage rates continuing to fall, particularly for those with lower deposits, we are seeing a rise in mortgage applications from First Time Buyers and also from investors seeking Buy To Let mortgages. Compared to January 2012 we have experienced a significant rise in applications.
So is it likely that estate agents will run out of properties to sell if things continue this way? I honestly don’t think it will get to that. However, with less competition from other properties for sale, all we know is that these market conditions are very favourable for sellers and that, if you have a quality property and are realistic about the asking price, this really is a great time to be selling.
For more comment please contact Robert Carroll of Mov8 Real Estate on 07920 101241 or email [email protected]