It is the time of year when we tend to look back on the previous twelve months and also look ahead to consider what the new year may have in store for us.
A reflection on 2021
In 2021, the residential property market in Scotland was booming. The most recent UK House Price Index figures (to October 2021) indicate an average annual increase in value of over 11% for residential properties in Scotland. Detached properties saw the biggest increase at 15.9% with flats averaging 8.1%.
The Blackadders residential property team in Glasgow opened over 600 new files last year and submitted offers on behalf of clients almost on a daily basis. Many of these were submitted at a closing date where there were several interested buyers and on several occasions we learned that over 20 offers had been made on a single property. We keep a note of the useful feedback provided by estate agents to allow us to offer clients the best advice possible on making a competitive bid. It was common to see properties sell for over 10% above the home report value and often the successful bid was over 20% above the home report value. With our assistance the residential property team across all of our offices helped hundreds of people find a new home in 2021.
A look forward to 2022
Predicting the future is always a risky business but it is my expectation that demand will remain strong in 2022 and that prices will continue to rise. Many people continue to seek bigger homes with more space and home office potential. Early indications reported from the Rightmove website this week suggest that buyer and seller demand remains high and Boxing Day 2021 was their best to date in terms of the numbers of new sellers.
I expect, however, the level of growth over the next 12 months to be less than the jaw-dropping levels seen in 2021. Inflation is now running at approximately 5% and last month the Bank of England raised base rate for the first time since July 2018, albeit from a record low of 0.1% to 0.25%. Further increases are possible over the course of this year and that, coupled with the general increase in the cost of living, may slow the residential property market this year.
Properties in good condition and in the right location will continue to be in demand and the competition among potential buyers is still likely to result in many closing dates being fixed but buyers may just show a little more restraint and the percentage over home report value being paid to secure these properties is likely to be less than may have been the case in 2021.
Only time will tell how accurate these predictions turn out to be but if you are thinking of buying or selling a residential property in 2022 please get in touch with a member of our team.
For any Residential Property questions or advice, please contact a member of the Team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.
Katharine Smith, Director
The opinions expressed in this blog are of the author only and do not necessarily represent the opinions of Blackadders LLP.
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