Spring / Summer 2011 Market Comment

One thing is sure, the Scottish property market will be a tricky one to call this year.

Registers of Scotland report that the average cost of a home in Scotland fell by just over 7% in the first quarter of 2011. Stacks Edinburgh certainly predicted falling prices for this year but there is some surprise that our predicted fall for the year was seen in the first quarter. Price falls in themselves are, of course, not a major reason for worry. We know that prices have been unsustainably and unaffordably high since the boom years and a correction should aid affordability. Falling volume of sales (down 35%) is a more concerning signal to the market’s health. We are of course talking in general terms and recent news stories tell of the rapid rise in the number of £1m plus home s sold in Scotland and that cash buyers represent between 25% and 40% of buyers in some areas of  Scotland.

A divided market then. Cash buyers pushing the better quality properties ahead and first time buyers still struggling to make a move.

Anecdotaly, and contrary to a recent comment by others that “Offers Over in Scotland is Dead”, we have seen more and more properties, typically quality period apartments, coming to the market at “Offers Over” prices.

Over the longer term a purchase now still makes sense in the key Scottish markets and time spent in research and negotiation should produce good results.