Brexit crisis? What Brexit crisis?
This seems to be the reaction of Scottish homebuyers to the current political discourse following the publication of research showing that property transactions hit an 11-year high in 2019.
Prices in the second quarter of the year rose by an average of 1.6 per cent over the same period in 2018, according to research by law firm Aberdein Considine. There were wide variations across the country but an overall 1.6 per cent uplift following a year of increasing uncertainty regarding our short- to-medium term economic future can only be seen as a measure of the market’s continued underlying strength.
Different inferences are being taken from the statistics, depending on what side of the Brexit debate one stands. For Brexiteers it is a sign that the public are ignoring the “doomsters” (as Boris Johnson would call them) and see little or no danger ahead from our forthcoming exit from the EU; Remainers, on the other hand, will see the trend as signifying a public fearful about the prospect of Brexit and therefore determined to get an important personal/family decision (i.e. moving house), done and dusted before 31 October.
My view lies between the two and is that ordinary folk are resigned to the country’s fate (good or bad) and have decided just to get on with life – similar to what happened 25 years ago when the UK government was forced, against the will of the then-prime minister John Major, to take the country out of the European Exchange Rate Mechanism.
Rising prices are, of course, not good news for first-time buyers, especially in this era of substantial deposits – but once first-timers do get on the property ladder, they can – one presumes – look forward to increasing equity as enjoyed by established homeowners.
Without a succession of (moderate) increases in property values, builders would be deterred from developing more homes, at a time when the population is increasing at a rate not seen since the 19th century. Also, there is a whole paper trail of direct and indirect jobs dependent on an active property market.
Perhaps just as interesting as the national picture are the regional/local trends in prices. Edinburgh retains the highest average price in the country but the rise was no greater than the national average. Prices in East Dunbartonshire, which contains affluent suburbs north of Glasgow such as Bishopbriggs, rose by just over 4 per cent while in East Renfrewshire (containing commuter areas including Giffnock) there was a decrease of just under 4 per cent.
However, the most spectacular rise of all – 15.2 per cent – was in East Lothian – hardly surprising as it must qualify as one of the best places in Scotland to live, with attractive towns and villages, rolling countryside, a magnificent coastline and many golf courses.
But there is a conundrum. The council is by far the largest employer (workforce circa 4,000) and while there is a varied private sector, no single private employer comes anywhere close to these figures. A council report revealed that gross weekly earnings among East Lothian residents as a whole are higher than the Scottish average but lower than the national average for those who work there. One must infer that proximity to the Edinburgh jobs market plays a significant role in local house prices. Obsession with ring-fencing the Edinburgh greenbelt means the capital is not being allowed to extend with the population.
This cannot be unconnected to the fact that almost 2,500 homes are being built, or in the pipeline, at Musselburgh, Pencaitland, East Linton, Haddington and Tranent. There is movement in the opposite direction too by Edinburgh residents for whom East Lothian is a popular place to spend their retirement.
When we were involved in marketing a seafront flatted development in North Berwick recently the properties sold almost as quickly as the incoming tide.
David Alexander is MD of DJ Alexander.