Time for your quarterly property update from Edinburgh Self Storage – the best self-storage facility in Edinburgh and the Lothians if you’re selling and buying or you’re getting your home ready for the property market and wish to remove your valuables!
Properties for sale in Scotland
Let’s begin with news hot off the press – figures on the number of properties advertised for sale in Scotland.
Scottish estate agent DJ Alexander has found that the number of properties advertised for sale has increased by 85% in Perth between April 2022 and April 2023.
During the same period there were increases of 65% in Inverness, 55% in Dundee, 54% in Edinburgh and 51% in Glasgow, but 8% down in Aberdeen.
The greatest increase in the number of properties for sale was among detached and semi-detached homes.
In Edinburgh, detached and semi-detached home volumes were up 197% and 122%, while in Glasgow, they were 210% and 73% higher respectively. They were 111% and 96% greater in Dundee.
All Scotland’s major cities saw the volume of advertised properties increase between March and April of this year.
Will UK house prices fall in 2023?
It’s looking that way.
House prices could fall by as much as 10% over the next two years because of rising mortgage rates and the cost of living crisis squeezing household incomes – that’s the forecast from the Office for Budget Responsibility.
Nationwide Building Society said house prices had fallen by 3.1% in the year to March – the largest annual fall since 2009.
The Bank of England has hiked the base rate eleven times since December 2021 from its record low of 0.1%, to where it currently sits at 4.25%.
This was a reaction to soaring inflation, which hit 10.4% in the year to February.
There was more demand at the start of 2023 following a fall in mortgage rates from their October peak, but higher mortgage rates have made it more expensive to purchase a home, the knock-on effect being falling prices for four consecutive months.
Further rate rises are expected in 2023 which could further dampen the housing market because it means mortgage repayments will increase.
The cost of living crisis is likely to be the biggest cause of a slowdown in the housing market, because as household budgets are stretched, fewer people can afford to buy homes.
First-time buyers’ hesitation to wait and see what happens could also negatively impact the market.
What are the variations in house prices across the four nations?
A decline in house prices happened in all four UK nations in the first three months of 2023, according to the Nationwide Building Society:
- Northern Ireland saw a decrease of 1.3%
- Wales dropped by 1.7%
- England fell by 1.9%, with East Anglia being the region with the biggest decline
- Scotland took the biggest hit – a drop of 2.3%
How do UK house prices differ for different types of property?
Since the onset of the pandemic, prices of detached, family homes are growing much faster than flats. One possible reason is that many of us are still working from home, upping the demand for larger properties with a home office.
Figures from the Nationwide Building Society reveal:
- A detached property increased by 26%, or nearly £78,000 in cash terms between 2020 and 2022. Looking at just 2022, detached properties increased by 5.9%
- Flats increased by 13.4% on average, or £23,000, between 2020 and 2022. Looking at just 2022 the average price of flats increased by 2.1%
Figures from the Office for National Statistics indicate a different trend, with semi-detached and terraced houses rising in price the most.
House price 2023 predictions
Finally, we’ve rounded up some house price 2023 predictions from those in the know.
The Office for Budget Responsibility (OBR) predicted in March 2023 that house prices would fall 10% over the next two years.
It said that property transactions are expected to drop 20% over the same period, caused by the rise in mortgage rates and the squeeze on household incomes.
It projected that prices will fall by 9% between 2022 and 2024, before starting to rise again throughout 2025.
In January 2023, Halifax predicted that house prices would fall around 8% over the year but added that a drop of 8% would mean the cost of the average property returning to April 2021 prices, which remain above pre-pandemic levels.
Lloyds Bank has forecast house prices to fall by 8% in 2023. It has set aside £668 million to cover the bad debt, which could arise due to borrowers struggling to make repayments.
Zoopla’s house price index for February found that sellers are being forced to reduce asking prices by an average of 4.5%, or £14,000, to get a sale.
Sources:
thetimes.co.uk
nationwide.co.uk
insider.co.uk
