“What Next for the Scottish Housing Market?”
We now have a published Scottish Route Map the way ahead and, hopefully, out of the Coronavirus Pandemic for many, in the week to come, this will finally provide a welcome removal of some of the practical restraints of moving house but – for a multitude of reasons – this will not mean a return to “business as usual” for quite some time to come.
In England the Government have allowed Estate Agents and House Builders to re-open their offices and recommence in person viewings with immediate effect, where these are not appropriate virtually. The English Guidance, however, has made it clear that the re-opening of the housing market “does not represent a return to normality” and when the Scottish Guidance and an opening date finally become available, we should expect to be faced with the same situation here.
In England, initially viewings are to be undertaken virtually where possible, whilst in person viewings are to be undertaken by appointment only and must follow “a series of safe working practices”. These practices include doing more of the process online such as virtual initial viewings, vacating the property whilst people are shown around and ensuring a property is thoroughly cleaned before someone else moves in.
The level at which buyers, sellers, agents and surveyors are satisfied that viewings, mortgage valuations and surveys can be undertaken safely on both sides of the border will be key in the coming months to come. Perhaps more importantly, however, the effect of the lockdown on finances and job security will ultimately determine underlying demand.
The economic rebound (or otherwise) will be key to future house prices given that, irrespective of the potentially ongoing low cost of borrowing, the economy itself is the trigger for employment, earnings and wealth.
In the short term and once the market does reopen it is likely that in Scotland we will see some downward pressure on prices (how severe this is may depend upon for how long the Government will continue to support the Furlough Scheme and how benevolent the lenders are in setting borrowing parameters). Longer term and particularly dependent in the North East on the oil and gas sector “recovery” there will hopefully be some degree of price growth, but this will inevitably take time and indeed it could be a few years before we see prices return to pre-Covid times.
Pat Gray, Partner