Covid-19 has had a significant impact on the nation, and undoubtedly the property market, with people remaining indoors until normalcy is restored.
We recently looked at how coronavirus has impacted the Greek property investment market as well as buyers and sellers in Spain, but how has the Scottish property market fared against the virus so far?
Below, Property Investor Today takes a closer look at recent analysis from ESPC, a real estate consultant in Edinburgh.
Property sales volumes and ROS
Unsurprisingly, there has been a marked decrease in both property sales volumes and the number of homes coming to market from mid-end March onwards, as people are unable to physically attend property viewings in light of the stay at home guidelines
To combat this, ESPC adapted to offer virtual property viewings and virtual valuations, enabling people to get started on their buying and selling journeys. They are also building lists of people who wish to view the property in person and put their property on the market once the social distancing measures have been lifted.
What’s more, the closure of the Application Record by Registers of Scotland (ROS) on March 24 has heavily affected the completion of property transactions.
While the Law Society of Scotland and ROS worked to establish interim measures to allow certain transactions to complete, the Scottish Government released guidance on March 31 stating that property moves should be delayed until after the threat of Covid-19 dies down.
ESPC highlighted that the significant drop in sales volume is a result of social distancing measures and guidance from the Scottish Government, rather than lack of demand.
Since its agents have started using innovative methods such as virtual viewings, they have received interest from potential buyers, highlighting that, while market activity is currently limited, there is still demand for property, which is likely to resume down the line.
Properties are still coming to market
While ESPC agents are now offering virtual valuations, properties in Scotland also need a Home Report before being marketed, which requires a surveyor to attend the property in person.
At present, the approach of surveyors is to delay these until after the current lockdown measures have been lifted.
The properties that came to market in recent weeks had their Home Reports and photographs prepared before the social distancing measures were put in place, which signifies that many of these sellers had already planned to put their home on the market in spring and decided to go ahead.
ESPC suggests that some sellers are happy to place properties on the market due to the opportunity to be exposed in a quieter-than-usual marketplace.
The firm noted that some of the properties coming to market recently have been smaller one or two-bedroom flats, many of which have characteristics associated with holiday lets and being in popular areas for tourists.
It is likely that short-term let landlords are stepping away from the market due to current travel restrictions. Some are reportedly selling their property, while others are moving to the long-term letting market.
Nick Llyod, head of ESPC Lettings, says: “We have received a number of enquiries from current landlords looking to advertise properties that have previously been advertised through Airbnb and other similar platforms.”
Property selling prices remain steady
ESPC’s March 2020 House Price Report, which covered the first quarter of 2020, revealed that while there had been decreases in sales volume and homes coming to market, both average selling prices and the average percentage of Home Report valuation achieved remained relatively steady.
The firm reported continuous offers on properties, often over the Home Report valuation.
It says that while transaction volumes will decrease significantly during this period of social distancing, property selling prices will remain stable.
Resilience of the Scottish property market
The first quarter of 2020 saw plenty of activity in the local property market in terms of both listings and sales, with a year-on-year increase on Home Report downloads and viewing requests suggesting strong demand for property in Scotland.
Over the years the Scottish – and particularly the Edinburgh – property market has been resilient. While the 2008 financial crash was completely different, having more of a slow-burning impact on the market rather than the instantaneous effect of Covid-19, ESPC spots some similar trends emerging.
For example, while transactions volumes fell in 2008, the Edinburgh property market weathered the recession well in terms of selling prices.
The property market is influenced by other economic factors, including unemployment levels. If the UK and Scottish Government measures to protect jobs and businesses are successful, then this should help to ensure the strong demand we saw for property at the start of 2020 remains as the social distancing measures are lifted.
Paul Hilton, chief executive officer at ESPC, comments: “Coronavirus COVID-19 has had a significant impact on the Scottish property market in terms of sales volume and the number of homes coming to market. This is to be expected with the current social distancing measures in place and the advice of the Scottish Government to delay moving home until after these are lifted.”
“At the start of 2020, there was strong demand for property in Scotland and so we expect property market activity to resume once the current social distancing measures have been lifted.”