Market re-awakes – let it not be a false dawn - David Alexander comment

The opening seven months of the Second World War became known as the “Phoney War” because during that period the Western Front remained deathly quiet and the feared mass aerial bombing of cities did not happen.

There have not been the same spikes one would expect during a normal summer, says Alexander. Picture: Jon Savage.

Six weeks after war was declared, many civilian restrictions were lifted and life at home returned to something near to normal. Therefore, while celebrating a substantial rise in activity in the property market since the easing of lockdown, I am mindful not to become over-confident lest what we are experiencing is a “phoney revival”.

Meanwhile, all that I and similar professionals in the sector can do is respond to public demand which, up to now, has reached levels beyond expectations in the dark days of April and May.

Back then, I had steeled myself for a Covid-inspired downturn in values on the presumption that demand would be limited and many vendors would need to compromise on price if they wanted to achieve a sale. In fact, vendors are putting their properties on the market in line with the usual experiences – growing or decreasing family units, changes to working patterns, debt, death and divorce – and potential buyers are responding for these same reasons.

Consequently, as demand has held up, so have prices. Admittedly there have not been the same spikes that one would expect during a normal summer but, in general terms, closing dates are the norm and properties achieving acceptable percentages above the “upset price”.

In Edinburgh specifically, a boost to the market has come from incomers who, after, say, six months of renting in the capital, have made a decision to become owner-occupiers (or return to owner-occupation). For whatever reason, Covid-19 is not deterring them from making this change as some people – myself included – feared they would.

The revival is happening across the board but different patterns are emerging. The clearest is the huge increase in interest – for understandable reasons – in properties with gardens or, at least, usable exterior space. So some of those “townies” who were once rather dismissive of “suburbia” are scouring the avenues and culs de sacs for a suitable home.

Benefits

Likely gainers from this trend will be owners of former local authority properties. Many of these, even if fairly limited in terms of square footage, were complemented by large back gardens and this is likely to increase their popularity, even perhaps among those who always swore they would “never buy an ex-council house”.

This will of, course, depend on the area but those “schemes” that have mostly been given over to owner-occupation can expect a price uplift. Having said that, Scotland is some way off from the experience at the Barbican in London, in the heart of the City, where tenants were given the “right to buy”; some of the properties there are now valued at nearly £1 million.

Back in the centres of Scotland’s cities, the already rising popularity in garden flats, which predates Covid-19, is likely to accelerate. Traditionally, in Edinburgh’s New Town, top-floor flats have easily been first choice among buyers because there was no one living above to bother them and the views were terrific. But most lack balconies.

By contrast, the private green space that comes with a garden flat will, for many, more than compensate for the lack of outlook. Most popular of all are likely to be ground-and-garden flats. The popularity of the New Town is such that competition for all property types is likely to remain strong; however, I detect that potential buyers are widening their options, bringing garden flats more into the loop than before.

The above, of course, will only happen if current activity is maintained, subject to seasonal variations. This will largely depend on action taken to control the virus – not just by politicians and captains of industry but also ourselves as individuals.

David Alexander is managing director of DJ Alexander

SCOTSMAN.COM

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