Lindsays, which is based in the Scottish capital, says it sees market appetite remaining robust despite ongoing economic uncertainty, adding that predictions of price collapses have not materialised, despite political and social turmoil.
It has calculated that the average price of an Edinburgh property – largely covering sales in and around the city, but also the wider Lothian regions – that it sold in 2022 came in at £325,000, up 2.8 per cent from the previous year. Turning to Dundee, its local estate agency recorded an average price of £204,000 last year, up 13 per cent from 2021, and the first time it has seen the city exceed £200,000.
The firm also cited Registers of Scotland figures showing that the average price of a property in Scotland in October – the most recent month analysed – was £194,874, marking year-on-year and month-on-month increases of 8.5 per cent and 1.1 per cent respectively. A separate report from Halifax published last month however showed that UK house prices fell by 2.3 per cent in November.
Lindsays believes the cost-of-living crisis and spike in interest rates triggered by Kwasi Kwarteng’s mini-budget in September saw the market shift from being heavily weighted towards sellers to being more balanced, with offers “now more commonly closer to the home report valuation”. The firm hopes that a more stable market in 2023 could be more productive for buyers and sellers.
Andrew Diamond, partner and head of residential property at Lindsays, said the firm is seeing a “resetting of the market” alongside no lack of appetite among buyers and sellers. “Predictions of doom and gloom have not materialised and the market has settled down, as we expected it would,” he added. “The outlook may, to some, have seemed dreadful in the very short term, but has improved as time has moved on. Interest rates have already started to settle. Mortgage rates are dropping slightly.
“What we might see in early 2023 is a much more stable, tradeable market, with prices at a slightly less frothy level but with a greater ability for buyers and sellers to actually trade – to get things done. Ultimately, it’s important to remember that a balanced market is a good market, particularly if you are both a buyer and a seller.”
Lindsays added that one change coming through “strongly” is a decline in the number of purchases being agreed subject to sale of the purchaser’s current property, a trend that it says has gained traction as prices skyrocketed in recent years, and means “more people are selling their homes before agreeing deals to buy another”.
Mr Diamond added: “Will we see some heat come out of the market? If you mean some of the extreme high prices we’ve seen in recent years, then absolutely. That’s not a bad thing in most peoples’ eyes. If what you end up with is a more tradeable position, that’s good. There’s definitely a move to being a bit more traditional about the ordering of your sale and purchase. I don’t see that reversing in the short-term.”