The end of 2018 saw much fanfare in the press about the Scottish property market outperforming the rest of the UK. Glasgow and Edinburgh both saw growth greater than anywhere else in the UK, outside London. Both Scottish cities saw average house price growth of 9% in 2018. So the average property in Glasgow rose from £126,016 to £137,507 and in Edinburgh prices rose from £242,807 to £264,7451. The comparative figure for the UK was 3.6% (£224,502 to £232,554).
There’s no specific reason for these price increases, unlike in 2015 which saw purchasers of high-value properties rush to complete before the new Land and Buildings Transaction Tax (LBTT) was introduced. We’ve even seen some average prices fall over the summer, only to rally again over the later months of the year. The increases have been helped by the overall economic outlook – low mortgage rates, high employment levels and steady wage growth. And buyer demand remains strong, as sellers appear to be more cautious about putting their homes on the market.
The market, like most in the UK, is not immune from the uncertainty being felt from the Brexit deliberations. Many property experts are predicting a slowdown in the market as the deadline for the UK’s negotiated exit from the EU approaches. The market never reacts well to uncertainty and Brexit is one of the largest unknowns this generation has had to cope with. Although the opposite is likely to be true as well – that after we learn what Brexit actually means, there will probably be a ‘bounce’ in the market.
Other speculators are wondering if the changes to the Additional Dwelling Supplement (ADS) section of the LBTT may have a noticeable effect on the market. The Scottish Government is increasing the ADS from 3% to 4%, effective from 25th January 2019. This is part of the government’s drive to help first-time buyers and try to bring more property to the market to make it easier to move up the property ladder.
Another consideration for the Edinburgh property market is the expected AirBnB property cap. If launched, as anticipated, it will limit the number of days a property can be let via Airbnb. This is expected to be 90 days, or thereabouts. Again, the idea behind this cap is to try to bring more properties on to the market. By making investing in property to take advantage of the short-term rental market less appealing, it’s hoped that some investors will sell their properties. Depending on how effective this is, it could have an impact on prices. But we’re not sure how market elasticity will work here.
So, if you’re looking to buy or sell in 2019, make sure you do your homework. There are no certainties in the property market. But choosing estate agents who know the local market is definitely the place to begin.
To find out how we can help you buy, sell, let or manage a property, give us a call on 0141 270 7878 or 0131 347 2522 or use our contact form.