Scottish housing market poised for 'two waves of bounceback'
Scotland’s housing market is poised for two waves of bounceback with the expectation of a return to pre-coronavirus levels, a leading industry figure has predicted.
The sector has been rocked by stay-at-home and physical distancing measures for agents, surveyors and prospective buyers, combined with a backlog in applications via the Land Register of Scotland service.
However, Paul Denton, the chief executive of the Scottish Building Society, which was established in 1848, said he was starting to see some signs that buyers were looking to life beyond the Covid-19 peak.
“We are still open for business, with our primary focus the health and welfare of our staff and our customers, ensuring we support them financially and emotionally through this time of crisis,” he said.
“We are starting to see signs that buyers are now thinking about life after the Covid-19 peak, with a rise in enquiries on purchase mortgages. And, indeed, our staff are busy processing remortgages, even for those on a mortgage holiday.”
Denton, who represents Scotland on UK Finance’s mortgages board, added: “I think there will be two waves of bounceback. The first, when Registers of Scotland fully reopens and starts clearing the backlog of applications from solicitors. And the second when social isolation measures ease and consumer confidence starts to grow.
“It is clear that the drop in sales volume is driven by social isolation and not a lack of demand from customers.”
New figures show that the average price of a property in Scotland in February was £150,524 – a year-on-year increase of 2.5 per cent, according to statistics from the UK House Price Index. The UK average house price was £230,332 – up 1.1 per cent.
The largest decrease was recorded in the City of Aberdeen, where the average price fell by 3.6 per cent to £143,990. The highest-priced area was the City of Edinburgh, where the average price of a house is £270,864.
Denton added: “These statistics pre-date Covid-19 but reinforce the trend of Scottish house prices rising faster than the rest of the UK as demand outstrips supply. However, there are marked geographical differences too, with the challenges in the oil and gas sector impacting the Aberdeen market.
“Scotland weathered the storm during the 2008 financial crisis. We know this is on a different scale, but the underlying market is resilient and that latent customer demand will see the market bounce back to something near the levels we saw at the beginning of the year.”