Home values are still 0.6% off their 2008 peak, while sales remain 30% lower than pre-crisis levels but first-time buyer activity is fuelling record prices in Aberdeenshire and Edinburgh.
Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, said: “You can’t walk down the street without feeling the force of the independence debate. But on the surface, July’s figures point to a strangely serene Scottish housing market that was not yet expecting such a close-fought storm.”
A favourable lending environment boosted demand over the summer, he went on to say, with 9,285 transactions in July, climbing 5% up from June to reach the highest monthly total since July 2008.
It was this factor that propelled prices to new peaks in July in some of Scotland’s centres of employment. Aberdeenshire and Edinburgh have seen transactions soar 20% and 25% respectively over the past year. But on the other side of the coin, uncertainty is leaving its trace – and squeezing supply has seen slower overall transactions growth compared to last year.
Sexton added: “Higher up the chain any prospective sellers with the luxury of time are hanging on to see which way the tide turns before they put their home on the market. However, depending on the outcome of the referendum this could reverse rapidly. There is a chance of a mass take-off and sale of investments, which would disrupt house prices in the short-term. Scotland’s housing market recovery is still in the delicate stages of rehabilitation, and the number of completed sales in the last twelve months still only represents 70% of the average over the period 2004-2007. Ambiguity surrounding Scotland’s future isn’t helping. We are in the throes of the longest period of sustained monthly house price growth since February 2007, but only time will tell whether this recovery will be derailed.”
And he warned: “A Yes vote would usher in a further sixteen months of uncertainty. A Scotland outside the UK would open the floodgates to the real questions of currency, exchange rates, mortgage risk, and property taxation. Many mortgage holders could see their LTV shoot up as the implications of borrowing from a bank in a foreign country are unmasked. A No vote doesn’t guarantee clarity either – but the mist of ambiguity would clear sooner.
“Whichever way the chips fall on Friday morning, two million unhappy people will wake up in a divided Scotland, with a rift carved through society. This division will not easily be overcome, and it is the job of businesses to keep calm and carry on as usual. In the aftermath of the biggest decision Scotland will ever have to make, everybody will benefit from swift answers to our questions – regardless of the final word from the ballot boxes.”
