The first quarter of 2022 has been and gone in a flash. Much like any properties that are listed on the open market! Though this has been going on for some time, hasn’t it?
The average selling price of property across Edinburgh and the Lothians is now £270,956 and properties are selling within just 14 days on average at Neilsons. In the wider local market, around 1 in 3 properties listed on the market for sale are now going to closing dates which illustrates the huge demand from buyers for local properties.
Despite sweeping and sensationalist headlines in the press emerging over the past few weeks, there is absolutely no indication of the local market changing any time soon with the huge levels of demand massively outstripping supply. Remember when reading the national press that there is simply no such thing as the “UK property market”, the property market in the UK is in fact a patchwork of local markets each with its own unique dynamics.
We saw these same headlines during the spring lockdown of 2020 with many commentators advising that house prices would simply plummet as a result of the pandemic with little reason, logic or evidence behind the dramatic claims. Neilsons advised to the contrary based on the levels of activity that we were seeing at the forefront of market activity.
Since spring 2020, property prices in Edinburgh and the Lothians have increased by 12%.
This has been due to a unique set of circumstances including historically low interest rates, high loan to value mortgages for first time buyers, and the rise of home working and re-assessed home needs at a time when many were increasing savings and looking to make a move. However, we can’t also overlook the crucial fact that Edinburgh and the Lothians has and always will remain an incredibly desirable place to live and work.
At the moment, the main feature of the market is simply one in and one out with many buyers reluctant to market their property before they have secured their next place. This has created a dysfunctional and overheated market with too many buyers chasing too few properties, which has in turn increased average prices and will continue to do so for some time. It is the simple economics of supply and demand.
With competition for properties so high, some buyers might find themselves waiting for a considerable period of time before they secure their next move. Some buyers are even writing emotional heart-felt letters to sellers, desperate for their Offer on their dream home to be accepted in the face of 15 other potential buyers throwing serious money on the table. In some leafy suburbs of Edinburgh, it hasn’t been uncommon for detached family homes to achieve over £100,000 over Home Report value at competitive closing dates. We have never seen the likes of this before in our 40 years’ of business.
In an ideal world, everyone looking to sell and buy would simply take the leap and place their property on the market speculatively which would balance out supply for the demand, creating a much healthier property market overall. However, this does not work for everyone, and this is why we are in the unique situation we are in.
2020 and 2021 were certainly extremely unique years of market activity. This point has been hammered home repeatedly by all. However, prior to the lockdown in 2020 activity was incredibly high so you could argue that the set of circumstances in 2020 and 2021 have simply added more fuel on to the fire of the desirable and incredibly busy local property market.
If we look at 2020 Q1 and compare this to 2022 Q1, sales in the area are up 16% and if you compare 2019 Q1 with 2022 Q1 sales in the truly pre-pandemic times, then sales are up 6% in Edinburgh and the Lothians.
Some commentators are reporting that sales are calming in the market in 2022 compared to the past few years. However, this needs to be contextualised. There are in fact a considerable amount of properties to be listed in the pipeline, it’s just that many people are waiting to buy before selling which has created these specific market conditions in 2022. There are fewer listings this year because too many buyers are waiting to secure their onward purchase before listing their own home for sale. Home movers, particularly those with young families, are simply unwilling to take the leap-of-faith required to list their home for sale without knowing where they are moving to. Whilst this results in fewer sales comparatively, it does not mean that there is any decline in the overall demand to sell and buy compared to previous years. Quite the contrary! The ESPC report that average monthly sessions on their property portal are up 39% in 2022 so far compared to the same period in 2019.
So long as the incredible demand continues to outstrip supply, closing dates will continue to be set for properties which are well presented, accurately priced, and professionally marketed – and as a result prices will continue to rise in Edinburgh and the Lothians.
Whilst the property market is of course not immune to a weakening economy or other social or political factors – we anticipate that the buoyant Edinburgh and Lothians property market will continue for some time. Even since pre-pandemic times from about 2018 onwards with the lack of market seasonality and the demand, the signs were there.
It has never been more important to take expert advice.
At Neilsons, our experienced solicitors and property consultants are on hand to talk you through the process of taking that leap and selling first. By listing first, you will know exactly what you have got to play with financially and you will be a much more attractive prospect to the sellers you are trying to buy from.
It becomes our job to negotiate and manage the timescales so your dream move can become a reality.
Whilst it can seem a daunting prospect, we carefully manage this scenario almost every day and our experienced and professional team offer free sale and purchase consultations to talk you through the entire process.