Glasgow West End Sees Higher Competition for Stock
Not since the heady days of 2006 has the West End of Glasgow property market seen the level of competition for current on-market stock. There are a number of reasons for this, but primarily Glasgow and indeed much of Scotland outside of Aberdeen is seeing historically low numbers of properties being offered for sale, allied to a growing number of purchasers shielded by the continuing ultralow interest rates being offered by ever more competitive lenders trying to push more product onto the marketplace.
Low Stock, Desperate Buyers, Affordable Money
Whilst much is made of the unfortunate position that first time buyers find themselves in now, mortgages are readily available up to 95% and even at this level, deals with interest rates at less than 3% are readily available. Even the much flaunted mortgage market review failed to significantly curb lenders’ enthusiasm for lending and borrowers’ enthusiasm for borrowing. This Holy Trinity of market factors - low stock, desperate buyers and affordable money - has resulted in price spikes in existing sales often in excess of 10% of the Home Report Value, with the West End of Glasgow now sitting comfortably 10-15% above the pre-crash levels.
Will It Continue?
The issue for house buyers and house sellers is of course, will these price spikes become the established market, where vendors and surveyors price accordingly, or do we need to remain defensive of adopting these new levels onto freshly marketed homes? It has been long hoped that a revival on the house building industry, both private and social, would cool the fires of house price inflation, however, delays in delivering planning and building warrants allied to an ever more complicated and convoluted planning process has resulted in no discernible increase in the volume of house building in Scotland. Numbers are certainly still very significantly short of the targets set by the industry and by Government. I fear we will be into the downturn in the property cycle before many of the much vaunted large scale developments start coming out.
So what is our advice to current home buyers and sellers? Well, unless you are able to relocate your family or employment from the West End of Glasgow to lower value areas, you need to budget prudently for what you might realistically expect to get for your existing property, or what you can borrow if you are a first time buyer. Ignore the chatter down the pub about some of the more outlandish sales that have been achieved, and set out your realistic purchase budget based on the Home Report Valuation and any local market evidence you can glean from your solicitor or estate agent contacts. If you are going to “push the boat out” with your purchase make sure you consider the terms of the Home Report carefully with respect to any future expenditure that might be required. Remember, as a cautionary note, those buying in 2007 have had to wait a decade to receive their purchase price back. There is only a certain amount of time in a market where values can increase more quickly than salaries or peoples’ ability to borrow and therefore it might be more wise to pursue properties where there is less interest, rather than as was seen recently in Oban Drive where there were 30 offers for the one flat. With regard to sales, look at setting your asking price around 10% beneath Home Report Value but certainly no more than 15% and look to achieve Home Report Value or slightly in excess depending on how the market is in your specific location.