Alasdair Mackenzie, who heads up the firm's Edinburgh residential department, reviewed the prospects for this year's market at our recent Spring Briefing and reported an increase in activity with a rise in the number of new buyers from the south and abroad. Here is a summary of the speech that he gave.
"You will all have read much over the past few months about the Edinburgh residential Property Market. We share the general view that the market has been tough for all of us since the peak of late 2007/ early 2008. There has been over the past year or so a gradual increase in confidence and demand particularly for quality properties.
The Residential Estate Agency departments in our 12 offices across Scotland have all enjoyed increased activity so far this year- a marked improvement on the same period last year.
Prices are much where they were a year ago and there is still an extreme shortage of decent houses and flats particularly in the 500,000 to 1,000,000 sector but buyers are more discerning than ever.
Some vendors are nervous of coming to the market and not being able to find a property to buy and with some historical expectations on price.
Quality property in the best locations of Edinburgh will still attract in some cases eye watering premiums but these remain the exception rather than the rule. Properties with even the smallest form of compromise may prove challenging to sell. We accompanied over 50 viewers in order to secure a sale on one property that we sold recently.
We launched our Residential Sales Department here in Edinburgh just over 2 years ago in a very tough market which was to coincide with the introduction of home reports. This has required a re-education for Scottish purchasers and vendors and has taken time to establish itself. We have worked closely with our clients to steer them through this process and to make the most out of the market conditions and of the new system.
So what of the outlook?
Property values reflect the economy. Going forward there is an election looming. Tax hikes and government cuts are a certainty. Interest rates are likely to go up and for residential property banks remain tight on lending in contrast to the agricultural sector. There is ongoing restructuring within the financial services sector. It is therefore very unlikely there will be an up lift in prices for the foreseeable future.
So, we live in changing times but as a firm we are cautiously optimistic about the year ahead for a number of reasons:
The stock market has seen a considerable improvement;
Buyers who are able to obtain a mortgage can borrow at favourable rates;
Interest on savings remains at a historical low;
There are plenty of buyers looking to move;
Sellers are becoming more realistic in their expectations partly thanks to home reports.
New buyers from London, the south and abroad are up in numbers;
The bespoke service that we offer our clients is paying off in these tougher market conditions;
So as far as Edinburgh is concerned there will only ever be a limited number of high quality properties and we can be confident therefore that prices will remain strong."
If you would like to discuss residential sales in Edinburgh then please do not hesitate to contact Alasdair.