With reports of house prices soaring following the lifting of lockdown restrictions earlier this year, it has been an extraordinary time for home buyers and sellers. Loraine Patrick speaks to three West End property professionals to find out what the picture has been like in our area.
Did lockdown get you thinking of moving to a new house? Want space for a home office, a garden or a move out of mum and dads? You are not alone.
The 10-week pandemic enforced hibernation earlier this year followed by advice to work from home saw a pent-up desire for change on the home front. Existing homeowners looked to trade up for green space and a home office, renters who after a few months back at mum and dads desperately wanted their own space, and there has been a rise in searches for second homes in rural locations, places to retreat to in times of short notice lockdown.
More specifically in the West End of Glasgow where there’s long been high demand for all types of housing stock, sales immediately after lockdown saw multiple parties bidding, dramatic closing dates and some surprisingly high prices. Cameron Ewer, Head of Residential Sales in Scotland for property agency Savills puts the initial rise into context.
‘In the three months since lockdown lifted prices have risen about three per cent. There have been cases where properties have gone for much more than that but on balance across all house types the increase is around three per cent.’
Cameron goes on to explain what sets the West End apart right now ‘is not just that it’s locally acclaimed, we have seen a 70 per cent increase in buyers looking up here from London. Property here is more affordable in comparison to other parts of the UK and that includes Edinburgh, and our ability to offer space and access to the countryside all within an hour of the West End of the city is unique. Not everyone is going for the full escape to the country – it’s about getting close to that without necessarily stepping away from a city life. It’s about a balanced city life and that is something Glasgow and specifically the West End has to offer.’
Property in the area traditionally sells quickly but right now West End houses and flats are coming on and off the market at speed. Alison Gourley is an expert in property law at Solicitors and Estate Agents Mitchells Roberton. She is acutely aware of how fast lawyers need to react, getting written offers out and being ready to respond with the right advice. ‘We are getting phone calls on a Monday morning about a property going to market,’ says Alison. ‘It would be launched on Wednesday, have viewings on Thursday, Friday and Saturday and go to closing date the following week. The whole process is often even shorter than that.’
‘We have been snowed under with business,’ she continues, ‘there still seems to be a strong desire for people to get on with their lives and make the changes they had planned for. The housing market is one of the biggest drivers of any economy and it looks from our perspective like there’s still a lot of activity going on. There is a big push for people to get into their next house.’
Add to this a stamp duty holiday on properties up to the value of £250,000 in Scotland – which covers much of the West End’s tenement stock – and you have all the ingredients for an extraordinary period for the market.
However, the pandemic may have motivated people to change home but there is caution from lenders. Aaron Reilly is a Mortgage and Insurance Consultant with brokers Scott Weir Mortgages. He says the pandemic may have caused people to re-evaluate their lives but that’s come at a time lenders have a reduced appetite because they are factoring in an increase in unemployment and a downturn in property values.
Aaron goes on to explain ‘the very high demand for mortgages comes just as lenders have less capacity because most of their staff are working from home. Furthermore, entry point mortgages or mortgages with low deposits have all but disappeared.’ Aaron describes how the lending market has changed since June. ‘Mortgages with 5 and 10 per cent deposits have been removed and the entry point has been a 15 per cent deposit. There are three or four lenders offering restricted access to 10 per cent deposit mortgages, but they are available only to existing homeowners and only offered for a day at a time to manage demand.’
So, with lenders trying to manage the flow of applications and factoring in risk it’s important for borrowers to shop around for the best mortgage product available. Aaron continues, ‘the rates on even favourable mortgages – those with 15 or 25 per cent deposits – are increasing on a daily basis.’ He advises using a broker if you want to or need to move. ‘The difference in appetite between one lender and another is huge and there’s a lot to navigate in terms of how lenders are viewing staff who have been furloughed, self-employed, used a bounce back loan or the income support scheme.
‘We are often able to help in cases where mortgages have initially been refused. Our knowledge and experience of the lenders’ criteria mean there are lots of cases where we have been able to go back to the same lender and get the mortgage for our client. Brokers are impartial and are going to do what’s best for you.’
So, after an extraordinary year in the property market what is the outlook for 2021? Our experts agree that people are now motivated to change home and the market in the West End will remain particularly buoyant.
Cameron fully expects these unprecedented levels of demand to continue. ‘The imbalance of supply and demand is driving prices forward. There will be more attention to pricing however and growth will perhaps level off, but the volume of transactions will remain because moves are happening because of lifestyle not financial choices.’
A view echoed by Aaron who believes that the outlook is sound. ‘I don’t think there will be a shock to property prices in the West End but I do think the market will settle and there will be a slight correction. People who buy here or trade up tend to be in occupations unaffected by the pandemic such as medical professionals, academics or teachers and their outlook is pretty secure.’
Alison agrees, ‘these prices, the really high figures – I can’t see them going backwards. Buying in the West End is like buying a good quality car and I think that is something the West End has always had. You look at Edinburgh and see flats going for £600,000 – that is exactly where we could be heading.’