Spring 2023 Property Market Review

The Scottish Borders sales market has made a surprisingly strong start to 2023

Following a quiet few weeks in the run up to Christmas we have seen an early spike in demand from buyers.

Sales agreed and the number of new prospective buyers and sellers registering in January was higher than in 2020, during the so-called ‘Boris Bounce’ that followed the December 2019 general election. In fact, the only time more new sales were agreed in the first month over the last 5 years was in 2022 at the height of the Covid affected rush to the coast and country market that pushed sales to double the normal levels.

Meanwhile, the number of new sales instructions and sales agreed in the traditionally quieter winter months has put to bed much of the concerns over a price fall in the aftermath of the economic disruption caused by the political shenanigans in the Autumn.

What are the prospects for 2023?

Caveats remain, including the fact the continuing trend towards a divergent market in Scotland with higher property taxes encouraging some of the more mobile buyers and investors to look South of the Border for a more benign regime. Meanwhile more mortgage reliant mainstream markets continue to have concerns over increased household costs and potential interest rate rises as the wage price spiral remains a concern.

Ron Hastings, head of property at Hastings Legal commented: “It must be said, the property market has started the year better than expected. Following September’s mini-Budget, a spike in mortgage rates led to some dire warnings about the fate of the residential property market. At Hastings Legal we have seen a promising start to 2023 where we have recorded the second highest number and value of offers accepted in January in the past five years.

While it is early days the evidence is that buyers and sellers have accepted the fact higher mortgage rates are back to more normal levels and that they are here to stay with inflation and the steps taken by Bank of England now the primary concern for future rates and affordability.

As prices are still achieving higher than valuations there is no firm evidence buyer budgets are adjusting downwards, while many have been encouraged that at least some of the heat has been taken out of the market. So with levels still ahead of surveyors’ valuations the question is how far will house prices mirror the decline in demand from cash rich buyers relocating to the area.

The answer is still unclear, but price growth in the prime London market was relatively subdued by its own standards during the pandemic. The latest data shows that property prices in prime central London are just below the pre Covid March 2020 level while in prime outer London they are 5% higher compared to the Nationwide UK index, which grew 20% between March 2020 and December 2022. A move to the north has become less of a bargain hunt purchase but the genie is out of the bottle and the enthusiasm for a better lifestyle in the Borders continues to drive the demand for properties.

Hastings Legal have years of experience helping buyers relocate to the Borders.

As Solicitor Estate Agents we provide a comprehensive service; one that is especially appreciated by those new to the Scottish property system. We even have a dedicated relocation adviser on hand to provide encouragement and answer the inevitable questions that buyers have as they consider a lifestyle move. The genie is well and truly out of the bottle and while it will take more than wishful thinking to find your dream home in the country savvy buyers are better informed and able to act on their purchase plans.  Having your ducks lined up with forward thinking and taking advantage of our property and legal expertise makes your move to the countryside more than achievable.

“It would be surprising if prices fell and we expect little change in the current forecast. If they were flat or rose slightly, it would be less than 5% either way providing buyers and sellers with greater certainty and ability to plan in calmer markets than we have seen in the past few years.”

© Ron Hastings February 2023

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