The last twelve months have been another rollercoaster for the Scottish Property market. After a shaky 2010, the professionals and the public all hoped to see the market pick up in 2011 and, for a while, it did. We experienced a flurry of early year activity, a fairly steady Spring and a decent Summer in parts.  In spite of this, 2011 has drawn to a close with another price drop in the final quarter just as it did in the year previous. As a result, sellers are left in the same uncertain position they were in at the opening of 2010. The current Euro situation, the restrictions on buyer lending and the recent bad press from the Bank of England on the economic situation haven’t helped matters. So how do we pull ourselves out of this property black spot in 2012?
The worst section of the market at the moment is undoubtedly the bottom end. The first time buyer market has been bolstered in recent years by the Stamp Duty holiday but ultimately the deposit amounts required by lenders are simply too high for most first time buyers. As a result, the average age of today’s first time buyer has risen to the early thirties. This situation likely won’t improve until late this year or early 2013 when lenders hopefully start to relax their lending criteria. In the meantime, properties on the market at the lower end generally face a tougher battle to sell. On a more positive note however, not everyone suffered in 2011. Good quality, decent sized family homes sold well throughout the year and actually increased marginally in value in comparison to the most other sectors. Despite coming down in value slightly, standard two to three bedroom flats have also proved to be fairly steady sellers. The top end of the market continues to move with properties over and close to the one million mark turning over at a reasonable rate. Going forward into 2012, the top end is likely to remain less affected than other sectors given it is the section of the market least affected by mortgage lenders’ reluctance to lend.
A good fact to bear in mind as we commence the New Year is that just because you can’t achieve the price you’ve dreamed of it doesn’t always mean you can’t move. To be successful in this market, you need to be realistic. Unfortunately values have come down since the glory days of four years ago where you could achieve tens of thousands over your asking price – that is the reality.  The key thing to remember is, in this market, once you accept the reality, you can work things to your advantage. Be realistic about your bottom line and what price you need to achieve because whilst the market is tricky for sellers, it is most definitely advantageous to purchasers. Whilst the value of your property has dropped since the highs of 2007, the value of your next purchase will have also dropped in that period. There is always a small chance to obtain a bargain on your prospective purchase once you’ve sold and being realistic won’t just help you, it’ll help move the market too.
Whether you are on the market or thinking about going on the market, get your strategy right and you can sell in 2012. If you’ve been on for a while, think about what you could be doing differently and what price strategy to adopt. Prices have dropped and if you remarket at a realistic price the chance of obtaining a sale will increase. If you’re preparing to go on, keep your price and expectations realistic and you will ultimately emerge successful. Understand the market and it’ll work for you.
For further advice on property related matters, please contact Ken Robertson.