First signs of a slowdown in the Edinburgh property market
For immediate release

There are early signs that the Edinburgh property market is starting to slow down following the post-lockdown boom, making it more attractive for house hunters and first-time buyers, according to a leading city estate agency.

Haymarket-based Purdie & Co Solicitors and Estate Agents reports that some properties are taking longer to sell and that some of the high premiums enjoyed by sellers since the start of August are beginning to tail away.

A tightening in lending practices by some banks and building societies, the collapse of the short-term letting market and the end of the First Home Fund for 2020 are among some of the factors driving the contraction.

While latest figures still appear to show the market is booming – Edinburgh saw a 6.2% hike in average selling prices between August and October compared with average rises of 7.5% and 7.8% in East Lothian and West Lothian respectively – there is some early evidence that those figures may represent only certain styles of properties according to Purdie & Co.

“While activity is generally much higher than usual for this time of year, we are seeing some month-on-month cooling in certain activities such as viewing requests and home report downloads for some properties,” said Nicki Douglas, senior property manager.

“Properties towards the lower end of the market are still moving relatively well and the lockdown has created a greater demand for homes with outdoor space.

“However, speaking to other estate agents, they are saying the same, that the market for flats is pretty quiet. Unless you have something noteworthy, either location or level of presentation, positioning or price, flats are staying on the market longer than they were in the summer.

“On the supply and demand scale, it’s now tipped more into a buyer’s market which is great, particularly for first time buyers.”

She added: “Most estate agents will tell you they are very busy but, after you drill down, you realise that’s it’s only for some properties, and because, with COVID-19 restrictions in place, logistically everything involves more work to organise.”

The deadline for the First Home Fund, which offers first-time buyers loans of up to £25,000 for deposits, closed on October 2 and new applicants will now have to wait until next year to take advantage of the scheme.

In addition, there has been a significant reduction in the number of high loan-to-value mortgages available. 

Ms Douglas said: “To get a 90% mortgage, the number of products available are a tenth of what they were back in March before the first Lockdown.”

“It’s difficult for people to get a mortgage in the first place. Some banks are only lending to existing customers and, with some lenders, you need to wait a month to six weeks for an appointment just to progress your application.”

She added: “Many investors are disappearing because of the collapse of the short-term letting market. A lot of the activity in recent years has been among people purchasing properties to let through Airbnb but, with people not able to travel, there are relatively few bookings. A lot of people contemplating selling properties because they don’t want to let them out long term.”

Earlier this year Kate Forbes, the Cabinet Secretary for Finance, raised the threshold for the Land and Buildings Transaction Tax (LBTT) to £250,000 to help boost the property market following the lifting of lockdown restrictions.

The threshold will return to £145,000 at the end of March 2021, by which time it is hoped life may start to return to something approaching normal following the recent announcement of a vaccine roll-out potentially starting at the end of December.

However, Purdie & Co believes the economic damage caused by the coronavirus may begin to wreak a heavier toll on the property market before then.

Ms Douglas said: ‘It’s anyone’s guess what will happen in the future but we may see forced sales among people who have lost their jobs or who can’t keep up mortgage payments because their income has been reduced.”

Notes:

• Purdie & Co is an Edinburgh-based firm of solicitors and estate agents which combines the marketing and selling of residential properties with provision of legal services, including conveyancing, Wills and executry.
• Founded in 1998 the company, owned and managed by Solicitor-Director Struan Douglas, services buyers, and sellers at every stage in their property journey and advise developers on whose behalf they also buy and sell properties.
• Other work includes remortgages and other conveyancing work, wills and executries, powers of attorney and notary public services.

• For more information visit www.purdiesolicitors.co.uk

For high resolution photographs please contact Carlos Alba on 0141 637 6399 or 07880 505647 or email carlos@carlosalbamedia.co.uk