We need stability not another property boom - Wilson Browne
The housing market depends on confidence, affordability, supply and people’s ability to make long-term decisions without feeling the ground is moving beneath them.
After several extraordinary years, I think Edinburgh and the wider Scottish market need something more valuable than another surge in prices - stability.
Before 2020, buyers and sellers operated in relatively predictable conditions. Interest rates were low and stable, giving people a reasonable idea of what they could borrow, repay and achieve when selling. Since then, that predictability has largely disappeared.
The pandemic closed the property market almost overnight before releasing enormous pent-up demand. At its height, some buyers were offering 30 per cent or more above Home Report valuation. Then came the cost-of-living crisis, rapidly changing interest rates and continuing economic uncertainty.
Despite all of that, the market continues to function and some properties remain fiercely competitive. Overall, however, buyers and sellers are more cautious.
One of the clearest consequences is the imbalance between supply and demand. Plenty of people still want to buy, but fewer owners appear willing to sell.
Earlier this year, I offered for a client on a property in a popular part of Edinburgh. The Home Report valuation was around £600,000 and the closing date attracted 20 offers. Our offer finished second, losing out to a cash buyer who, I understand, offered around 22 per cent over valuation.
That does not mean the whole market is booming. It shows what can happen when too many buyers are chasing too few suitable properties.
Property chains are also becoming more common. Buyers may be reluctant to sell until they know where they are going next, making their offer conditional on selling their own home.
Before long, several households can become dependent on one another, adding delay and fragility to transactions.
For clients, the lack of progress on missives can quickly become frustrating, turning the process into a game of domino rally. In that environment, certainty itself has value.
A seller with a property worth £700,000 might receive an £800,000 offer dependent on a sale and mortgage, alongside a £750,000 cash offer ready to proceed. The higher offer is tempting, but it is not automatically stronger. All that glitters isn’t gold.
A healthier market should therefore not simply mean rapidly rising prices. More listings, more transactions and greater confidence among buyers and sellers could represent a healthier market even if price growth were modest.
Edinburgh will remain desirable and expensive. The real question is whether enough people feel confident enough to move.
Stability does not mean guaranteed price rises or a return to ultra-low interest rates. It means enough predictability for households to understand what they can afford and make decisions with confidence.
After six years of disruption, Edinburgh does not need another property boom. It could simply do with being a little more boring.
There is a temptation to judge the health of a property market by one measure above all others: price. Rising prices are taken as a sign of strength and falling prices as a sign that something is wrong.