A sense of perspective is invaluable to understanding the property market. Speculation should not be grounds for decision-making, especially about buying a home. The UK property market has entered a cooling phase. Experts predict slowed-down house prices for 2023. The Scottish property market does not react to market downturns the same way as the rest of the UK. It is a robust market that performs relatively well despite volatility elsewhere. So, what do Scottish property trends in 2023 look like as The Scottish Fiscal Commission forecasts a 5% drop in house prices for 2023? These facts will help you get a clearer idea.
Why did UK property prices go up so high?
Since the pandemic, the Scottish property market has seen a flurry of activity driven by the race for space and stamp duty holiday between July 2020 and March 2021. Prices rose steadily, driven by post-lockdown pent-up demand not adequately met by supply. People wanted to move to the suburbs, the country, and the coast where bigger homes with garden space were affordable.
Everyone wanted to escape the city where a pandemic was riskier. Remote working enabled any distance from workplaces possible. This new appreciation for space and non-urban life is still very much strong among homebuyers.
Even despite the cost of living crisis, the housing market remained strong. People were willing to invest in a home regardless of financial strains. A good home with the space to be comfortable in times of uncertainty and unprecedented crises became the post-pandemic property goal.
Return to normalcy
As interest rates rose, the housing market softened. According to the Nationwide Building Society, house prices in the UK fell for five months in a row in January 2023. Rival Halifax records roughly flat prices in January but prices fell each of the previous four months.
The Scottish property trends for 2023 do not show signs of tumbling. The Scottish market is usually steadier than the rest of the UK. During market downturns, prices rarely fall but rather stall. Scottish house prices were never as exuberant as that of London and southeast England. Figures for the final quarter of last year suggest that the market was reaching pre-pandemic levels.
According to the latest data, average house prices in Scotland increased by 5.7% in December 2022 compared to the same period in 2021. Detached houses recorded the biggest price increase, an 8.8% increase from December 2021 to December 2022.
UK House Price Index for Scotland shows a slight reduction in the monthly average price of a property in Scotland. The latest data show the average house price in Scotland decreased by 2.9% between November and December 2022. However, it’s important not to put too much weight on non-seasonally adjusted monthly data as the wider economic outlook may seem different.
The average price of a detached home for December 2022 was £343,027, an 8.8% increase from 2021. The average price of a semi-detached home was 201,053, a 7.3% increase from December 2021.
Property forecast for 2023?
The good news is the Scottish housing market is not heading for a crash. There was never a house price bubble in Scotland, so nothing to burst. Contrary to speculation, Scottish property trends in 2023 are performing well. We need to remember that any dips in the market are from unprecedented levels of activity. Any price drops are from historic high levels and do not reflect actual property values. Prices are steadying themselves from unusual highs, a welcome stability for buyers.
Interest rates do put pressure on homebuyers. Uncertainty about future rates only makes purchasing more urgent. Fixed-rate mortgages have already priced rising rates, and as lenders see a drop in applications, they also relax criteria. As rates are nearing the peak and are forecasted to fall later this year, you might also want to consider tracker mortgages and variable mortgages. You can also get a shorter fixed-rate deal and remortgage as rates change.
High-yielding properties like larger family homes will be worth your investment. And as energy is becoming a key cost for households, homes with better energy efficiency ratings will become more valuable. It not only means that you will have lower energy bills but also add to the value when you are selling. Any fall in energy prices is not sustainable.
New builds designed to contemporary specifications and the latest environmental standards, will retain their value. “A” rated gas central heating systems and solar panels add to sustainability, something potential buyers will want.
Should you buy now?
If your financial circumstances allow you to get a mortgage, 2023 is a good buying year. Remember, the property market is cyclical. The cooling period may not last. Interest rates may also rise again. Securing a mortgage now will help you avoid any future higher rates. If we learnt anything from the past years, it is to expect the unexpected.
If your affordability is limited in the city, you will have a better chance in the country. Detached and semi-detached homes with ample garden space will give you more for your money than flats or maisonettes. And, if you are worried about the daily commute, you will be surprised how easily you can commute to the city centre from some towns and villages.
Conclusion
The current property market still offers opportunities for both buyers and sellers to achieve their goals. Are you still holding out for your dream home? It’s time to discover our developments in Stonehaven, Blairgowrie, Methven, and Crieff. All have easy access to the city but with the tranquillity
of the country. Premium-built, high-energy performance 3 and 4-bedroom GS Brown homes with solar panels and high energy-efficiency-rated integrated appliances are valued investments that can secure your future. Where do you want to live?
