According to the Royal Institution of Chartered Surveyors, our impending departure from the EU means fewer people are considering a house move, leading to an outlook for this current quarter that was described in some alarmist headlines as the worst seen in 20 years.
Before everyone in the housing sector starts weeping into their cups of tea, let me remind you that these stories relate to the whole UK market – which is hugely influenced by what’s happening in London.
So, while it’s true that house prices have indeed been falling in the UK capital and the south east, and stalling in the likes of the East Midlands, they are still steadily rising in Scotland. In fact, Scottish cities have seen some of the strongest price rises in the UK since the EU referendum.
The reality is we’re not seeing any evidence of a slowdown in market activity in Scotland. Quite the opposite. In January, we commissioned more homes for sale than in any other January since we founded Corum in 2003. Our property listings for January and February so far are up an average of 36 per cent, with areas like Shawlands and Pollokshields in Glasgow particularly busy. Now, whilst one month is hardly a fair representation of how the year will pan out, the consistency has continued through February and our pipeline business and off-market sales are suitably encouraging.
Ayrshire is also doing very well. Ayr, Prestwick and Troon delivered above-average sale prices during 2018, with home report values being exceeded by as much as 25 per cent. I believe the increasing popularity of these towns is due to a combination of value for money and a coastal location attractive to downsizers particularly from our cities. Over half of our Ayrshire buyers are not from the area.
The market in general is one of healthy buyer demand, supported by readily available and competitively priced mortgage products, which is helping to maintain or even grow property values. Interest rates are affordable and there are good deals to be had for borrowers. There is still an imbalance between supply and demand in most areas;however, our encouraging January figures suggest that seller confidence is continuing to rise.
We saw an increase in high-value sales as 2018 came to a close, with momentum carrying into this year. To put this into context, last year we sold more homes around or over £1 million than we did during the last market peak in 2006/07 – cause for more optimism, as this is the market segment that many experts predicted would be most affected by Brexit. There is no doubt in my mind that the sustained high level of political uncertainty in recent years, due to the possibility of independence closely followed by the EU referendum, has meant that consumers have become far more resilient to possible change.
A few years ago, people might have been more inclined to adopt a wait and see approach. Many now have caution fatigue and just want to get on with their lives. In a recent poll of our active buyers, 65 per cent said Brexit would have no influence at all on their plans to move, with a further 20 per cent saying it would have little influence. I believe our strong start to 2019 will continue, particularly with a number of new-build projects coming to the market in coming months that should boost the current shortage of stock.
All in all, despite the ongoing climate of political uncertainty, I believe the Scottish housing market is in a great position to weather whatever storms Brexit may throw at it. 2018 was a rewarding year for those attuned to the underlying market dynamics, and for the rest of 2019 I predict more of the same. My advice is therefore to ignore those London-centric headlines and stay optimistic – for us in Scotland, it’s far from all doom and gloom.
John Kelly is managing partner at Corum Property.