September sparks a surge in sales and rentals - David Alexander
So sang the late Francis Alberto Sinatra in one of his most endearing ballads, The Warm September of My Years.
If you study the lyrics it soon becomes clear they are, in fact, a reflection on life. However they could just as easily apply to the residential property market.
April, May and June are the most active months, followed by a lull during July and August as folks concentrate on their summer holidays. But then September brings a sudden uplift for various reasons, both abstract and practical.
While there are exceptions, on balance September is the last “warm” month in the calendar year, something which will obviously create an environment conducive to an active property market. This does not mean sales come to a halt during October, November and December but the ninth month tends to be the final one in which homes and – perhaps just as importantly - their immediate surroundings, will look their best until spring of the following year.
The fact that September marks the end of the summer holiday is in itself a strong motivator for potential buyers to act, bringing with it a feeling of ‘change’ and ‘renewal’. With winter on the horizon, people realise that increased darkness restricts the options for viewings, particularly when the clocks change at the end of October, thus reducing the potential number of interested parties. This is another incentive to sell in September when early evening viewings are still possible in daylight.
September buyers are also motivated by a desire to not just secure a property but also be settled into it before the festive season is under way. They don’t really want to be moving house at the same time as shopping for Christmas presents or making costumes for their child’s school nativity play.
The month is also a highly-active one for the rental market, particularly in the student sector with the beginning of another university year. In addition, this is the time when many young people start their first job or older people change employment or even career. If the place of employment is far from home – as is often the case – then rental accommodation, of various durations, will be required. More mature renters often use a rental property to “test” their new town or city before deciding on a neighbourhood in which to buy a home to accommodate their family.
For the reasons above, satisfying the need of every new private tenant in September has often proved difficult but this year is proving particularly so. As already stated in previous columns the returns for all landlords are diminishing, causing increasing numbers to sell up. This month’s announcement of a rent freeze in Scotland by the Holyrood government has, not unnaturally, proved to be the last straw for some.
Yes, logic says the result should be more properties (mostly flats) becoming available to owner-occupiers but alleviating one problem by making another worse is no solution to our housing shortage.
I’m also concerned that despite Edinburgh City Council’s recently-announced ‘clampdown’ on short-stay lettings, long-term landlords may still be tempted to switch to this sector, buffeted as they are by tax changes at Westminster and regulation at Holyrood. The council is insisting all holiday-related and similar tenancies should be licensed, something with which I am fully in agreement. What really matters, however, is the extent to which licences will be permitted. If a substantial number of flats within a small area of the Old Town are licensed for use by tourists this will make no difference to the alienation currently felt by more permanent owner-occupiers and tenants. And even with the costs of regulation, Airbnb and similar properties may still be a more profitable option than long-term letting, thus continuing the lack of availability faced by people who work here and need somewhere to rent long-term.
Returning, finally, to the opening of this article, the desire to sell in September does not apply to everyone. A minority of potential buyers are prepared to wait until winter to put their plans into action. Their reckoning is that any reduced price they may have to accept will be reflected in the property they go onto buy, so at the very least they will be no worse off. And while there might be less choice between November and March there also will be less competition, meaning that if a house that ticks all their boxes comes onto the market it’s more likely to be achieved at an affordable price.
While the jury may be out on this one it does provide food for thought.
David Alexander is chief executive officer of DJ Alexander
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