Cause for cautious optimism as property sector takes stock at 2024's midpoint - ​Phil Harris

As we approach the midpoint of 2024, the first half of the year has seen a blend of stability and growth, with Edinburgh, Glasgow and their surrounding areas remaining a focal point for property dynamics.

Many commentators are maintaining a cautious optimism in the market which seems justified, especially if the hoped-for interest rate reduction at the next Monetary Policy Committee meeting this month occurs, following a number of decisions to hold the rate over the past 12 months. A start in the downward trajectory of interest rates and the resultant improved mortgage products hitting the market should drive the market upwards as anticipated.

Edinburgh and beyond

Phil Harris is Director, Private Wealth and Tax, Shepherd and Wedderburn.​​​​​​​

ESPC’s Quarterly Results showcased a steady market in the first quarter of 2024, with a marginal annual increase in selling prices of 0.3 per cent, bringing the average sale price to £270,366. Listings saw a significant rise of 16.5 per cent, coupled with a 2.6 per cent increase in sales. Buyers paid an average of 100.9 per cent of the Home Report valuation, slightly less than the previous year. Properties took a median of 31 days to go under offer, indicating a slight cooling off from last year’s pace.

Glasgow and beyond

GSPC has released its first quarter results for 2024, showcasing a 2.5 per cent increase in average property prices compared to the previous quarter, signalling a steady recovery from the economic downturn. The number of transactions has notably risen by 8 per cent, reflecting heightened market activity and consumer confidence.

The GSPC’s data aligns with the broader economic indicators, as the UK’s GDP grew by 0.6 per cent in the first quarter of 2024. Scotland’s GDP outpaced the national average, with a growth of 0.7 per cent, driven by a 2.1 per cent increase in production output. These figures underscore the economic optimism and the potential for sustained growth in the property sector.

Some regional highlights

• Edinburgh remains the most expensive region,

• Dunfermline witnessed a significant 14.9 per cent annual rise in average selling prices,

• East Lothian attracted the highest premium overall, with buyers paying 101.4 per cent of the Home Report valuation.

Looking forward

The Scottish property market is navigating through a period of adjustment. The consensus among estate agents and legal professionals alike remains one of cautious optimism, with expectations of a more stable market, as buyers and sellers become more attuned to the cost of mortgages and overall affordability.

As the year unfolds, it is anticipated that the upward trend will continue, buoyed by the improving economic landscape and government incentives for first-time buyers. This of course is all prefaced with a looming general election and the unpredictability that a potential change of government brings with it.

In conclusion, the Scottish residential property market for the first half of 2024 has demonstrated resilience amidst challenges. With a steady increase in property listings and a cautious yet optimistic outlook from industry experts, the market is poised for a gradual post-pandemic recovery as it adapts to the evolving economic landscape.

Phil Harris is Director, Private Wealth and Tax, Shepherd and Wedderburn.