Supply shortage signals boom 2007 for property market in southern Scotland

Property prices in Edinburgh and the Lothians are likely to surge forward in 2007 as a shortage of quality properties continues to keep the market highly buoyant, according to the ELPG group of leading property solicitors.

Many solicitors/estate agents are entering the New Year for the first time ever with little stock on their books after buyers continued to snap up properties right through the traditionally quieter late autumn/winter period.

And with demand remaining high leading to confident predictions that 2007 will get off to a flyer, the ELPG is urging anyone thinking of putting their properties on the market to strike now to take advantage of the unusual circumstances.

The ELPG is made up of seven of the most experienced solicitor firms operating in the Edinburgh and Lothians property market - Drummond Miller, Leslie Deans & Co, Hunters (part of Gillespie Macandrew), The Lints Partnership, Neilsons, MacMac Residential and Warners. Together they account for 25 per cent of all sales within the ESPC. In 2005 the ELPG sold more than 4600 properties – up 11 per cent on 2004.

Steve Spence of ELPG member firm Neilsons said 2006 was characterised by the lack of the usual seasonal peaks and troughs, meaning that Edinburgh now effectively has a year-round market.

He said: “Every property solicitor will confirm that this has been an exceptionally busy year for house sales. The statistics support the view that there were no major peaks and troughs this year.

There has, however, been an imbalance in the market because the sellers have reverted to type and generally adopted the traditional view of delaying putting their property on the market until the spring and autumn.

The result is that supplies were insufficient to meet demand during the summer and winter which resulted in some record prices being paid for properties that were on the market.”

Statistics from the ELPG’s Market Report, which analyses properties listed and sold by the seven members each week, show that around a month ago homeowners starting giving up the idea of selling, expecting the usual pre-Christmas fall-off in the market.

But Steve said: “The remarkable thing is that nobody appears to have told the house buying public about the seasonal lull as they have been continuing to purchase right up until the wire this year creating a major supply problem.

As we look forward, we also can’t ignore the impact of what we in the ELPG call the Blue Sky Sunday Syndrome – the phenomenon where if we have blue skies in January and February buyers come out in force but the number of properties on sale are low because sellers follow the conventional wisdom of waiting until spring to put their homes on the market.

If the weather is kind over January and February, we’ll again witness Blue Sky Sunday Syndrome, and this coupled with pent-up buyers demand will likely see the property year in 2007 start with a boom. That’s why it makes sense for anyone thinking of selling to stop delaying and get in touch now with their solicitor.”

Scott Brown of fellow ELPG member Warners agreed that with stock remaining low and demand high, there’s every sign that the local property market in 2007 will remain extremely strong throughout the year.

He said: “Some of the firms we have spoken to have almost sold out of their stock of property. Last year we had around 150 properties on our books. We currently down to about 60. This is a situation that we haven’t experienced before.

Last Friday – just over a week before Christmas – we’d sold four houses, putting us into double figures for third week of December. But the reality is that as sales continue, most of these sellers then need to buy – and if the supply is not there, then demand for those quality property that are available soars. Regardless of the recent – or indeed any other early - interest rate rise, the market should remain very positive in 2007 as both those wishing to purchase their own home and also those wishing to invest will continue to find Edinburgh and the Lothians a popular choice.

“My guesstimate for growth for 2007 is seven per cent for the year - so more of the same steady sustainable growth as we have seen in 2006.”