Coronavirus and the Scottish property market: a timeline
We’ve compiled a timeline of Coronavirus and the Scottish property market, highlighting week-to-week impacts and effects.
- Change to LBTT nil threshold comes into effect.
- ESPC reports high volumes of activity since property market restrictions were relaxed.
High levels of activity since restrictions relaxed
The change to Land and Buildings Transaction Tax (LBTT) came into effect on the Wednesday of this week.
ESPC also reported evidence of exceptionally strong levels of demand for property since the 29th June, well exceeding pre-COVID-19 levels in some cases.
6th – 12th July
- Scottish Government announce nil LBTT threshold will be raised to £250,000.
- Scottish Government announce an additional £50 million investment in the the First Home Fund.
Change to LBTT announced
This week the Scottish Government announced that the nil LBTT threshold would be raised from £145,000 to £250,000 in order to support the Scottish property market and buyers during the Coronavirus pandemic. They confirmed that this temporary change would take effect from 15th July 2020 until 31st March 2021.
The Scottish Government also announced that they would be investing an additional £50 million into the First Home Fund, to help first time buyers onto the property ladder.
- Restrictions on house moves in Scotland relaxed.
- ESPC reports evidence of pent-up demand throughout June.
House moves restrictions relaxed in Scotland
On 29th June, restrictions on the Scottish property market were relaxed. This meant that activities such as physical viewings and house moves could go ahead, provided government guidance on social distancing, hand washing, respiratory hygiene and face coverings was followed.
This week, ESPC reported evidence of growing demand to buy and sell property in the run up to 29th June, with the highest number of property valuation requests recorded in a month. In the last week of June, there was also a 200% increase in viewing requests compared to the same week the previous year.
22nd – 28th June
- The Scottish Government publishes guidance on the moving process in anticipation of restrictions being relaxed on 29th June.
Official guidance on house moves is released
On 23rd June, the Scottish Government released guidance on moving house safely, detailing how various aspects of the moving process should go ahead from the 29th June.
This guidance outlined how aspects of the process would be difference, including doing more of the process online where possible (for example, viewing a property virtually in the first instance) and following government guidance on social distancing, hand washing, respiratory hygiene and face coverings.
15th – 21st June
- First Minister announces that restrictions on house moves will be relaxed on 29th June.
29th June confirmed as date when property market restrictions would be relaxed
On 18th June, the First Minister made an announcement regarding the start of Phase 2 of easing lockdown restrictions. The Scottish Government stated that restrictions on house moves would be relaxed on the 29th June.
ESPC noted a spike in activity such as viewing requests and Home Report downloads the following day, indicating that the announcement had encouraged buyers to progress their property search.
1st – 14th June
- Evidence of rising demand to buy and sell property once restrictions are relaxed.
- ESPC investigated whether demand to move to the countryside is rising.
Start of June sees rising demand for property
The first two weeks of June saw evidence of increasing demand to buy and sell property in Scotland once restrictions were relaxed.
ESPC also investigated whether demand to move to the countryside was rising. Our findings suggested that demand to move was rising across all areas of Scotland rather than specifically rural areas. However, the reports from firms suggested that buyers had different priorities compared to before lockdown with gardens being particularly high on wish lists.
- ESPC agents report rise in enquiries following the relaxation of English market restrictions.
- UK announces mortgage payment holidays will be extended.
- Scotland enters Phase 1 of the easing of lockdown restrictions.
Demand to move house in Scotland rises after English restrictions relaxed
While ESPC had noted increases in viewing requests, Home Report downloads, valuation requests and web traffic for a number of weeks, these increases became more notable after some of the English property market restrictions were eased, and the publication of Scotland’s COVID-19 route map.
Comparing the two weeks after the English property market restrictions were relaxed to the two weeks before, there's been a 60% increase in viewing requests, 37% increase in Home Report downloads and 16% increase in web traffic sessions on ESPC.
In a survey of 30 ESPC agents from across Scotland, 23 reported that they had received a greater number of enquiries from buyers and sellers since restrictions on the English market had been eased.
During this week, the UK Government also announced that mortgage payment holidays, which were initially offered for a three-month period, could be extended by another three months.
18th – 24th May
- Scottish Government published COVID-19 route map outlining phased easing of lockdown restrictions.
Scottish Government provide information about the phased approach to easing lockdown
After some lockdown restrictions were relaxed in England the previous week, on 21st May, the Scottish Government published a COVID-19 route map, outlining a phased approach to easing lockdown restrictions, with Phase 1 beginning on 28th May. This gave some indication about when certain housing market activities could go ahead in Scotland.
Phase 1 includes “preparing for the safe reopening of the housing market” while Phase 2 includes the “relaxation of restrictions on housing moves”. There are certain criteria that must be met before Phase 2 can begin. The next formal review will be held on the 18th June.
11th – 17th May
- English property market restrictions relaxed.
- ESPC agents report buyers making offers after viewing properties virtually.
House moves and physical property viewings allowed in England
On 13th May, some general estate agent activity resumed in England, which included visiting an estate agent or letting agent, viewing a property to rent or buy and moving home. Guidelines were introduced to help ensure these activities could be done while adhering to social distancing measures, and people were encouraged to take a virtual first approach with regards to property viewings.
These regulations did not apply in Scotland – the Scottish guidance, which is still in place, advises against in person property viewings, visits to estate agents and moving home at present.
However, during the same week, ESPC agents reported that virtual property viewings were being received well by property buyers and sellers. Several agents reported that they had received offers on properties after a buyer had viewed them virtually.
4th – 10th May
- Scottish Government announces aid for private rental landlords.
Interest-free loans announced for landlords
On 5th May, the Scottish Government announced a £5 million fund that will offer interest-free loans to landlords whose tenants are having difficulty paying rent during the coronavirus (COVID-19) crisis. The Private Rent Sector Landlord COVID-19 Loan Scheme offers eligible landlords up to 100% of lost rental income for a single property.
It supports private-sector landlords who are not classified as businesses, have five or less properties to rent and have lost rental income due to tenants unable to pay rent as a result of the COVID-19 pandemic.
- Survey of ESPC agents revealed that there is a significant amount of properties waiting to be brought to market after lockdown.
- Scottish Government announced that the second Scottish Coronavirus Bill will include details on an extension of the refund period for the Additional Dwelling Supplement.
Supply of properties waiting to come to market in Scotland
A survey completed by 37 of our member solicitor estate agents indicated that the majority of respondents had five or more properties waiting to come to market after lockdown, while 27% of the agents that responded had 10 or more. This suggested that there is a healthy supply of homes to be brought to market after lockdown.
Further encouraging signs were seen with regards to engagement on espc.com, with web traffic starting to increase. Google searches for property related terms have also increased since the start of lockdown suggesting that people are interested in moving home after lockdown. This coincided with increases in Home Report and viewing requests on espc.com
During this week, the Scottish Government announced that the second Scottish Bill on Coronavirus will include details of an extension to the refund period of the Additional Dwelling Supplement (ADS) for those that had bought before a certain date.
The ADS charge applies on second property purchases, but is refunded if one of these homes is sold within 18 months. However, due to the current guidance preventing most house moves, some people won’t be able to sell their previous home within the time frame, which is why an extension has been proposed.
13th – 26th April
- Started to see some encouraging signs with regards to buyer and seller engagement on espc.com
Encouraging signs of property buyer and seller engagement
Some initial encouraging signs start to appear with regards to buyer and seller interest on espc.com, with small increases in web traffic and other key metrics. These were still lower than usual for this time of year, but this appeared to suggest some people are starting to develop more interest in moving home post lockdown.
6th – 12th April
- Some ESPC agents reported that offers were being made despite social distancing.
- Agents also continued to receive enquiries from buyers interested in viewing post lockdown.
Property buyer interest remains in Scotland
Despite being two weeks into lockdown, this week some ESPC agents reported that buyer interest remained. A few offers were still being agreed on properties despite in person viewings not available, with buyers relying on a virtual viewings or the Home Report, schedule and photographs if a virtual viewing wasn’t available.
ESPC agents also reported that offers and notes of interest were being made subject to an in person viewing once the current restrictions had been lifted. While others said that asking to be contacted after the restrictions had been lifted so they could view properties when it was safe to do so.
- Scottish Government released guidance advising that house moves should be delayed if possible.
- ESPC March 2020 House Price Report revealed fall in sales volume while selling prices stay steady.
- Scottish Government passed emergency law extended eviction notice period to protect renters.
Scottish property transactions delayed
This week the Scottish Government released guidance that house moves should be delayed if possible. They asked for buyers and sellers to be flexible and negotiate a new date of entry if they were able to.
This resulted in the delay of the completion of many property transactions, which means the property sales volume in Scotland has declined dramatically.
In our March House Price Report, which covered the first quarter of 2020, we revealed a fall in property sales volume and listings, largely concentrated in the last two weeks of March. However, the average selling price and percentage of Home Report valuation achieved stayed fairly steady.
During this week, in order to protect renters, the Scottish Government passed an emergency law to extend the eviction notice period to six months.
23rd – 29th March
- Lockdown measures put in place as non-essential businesses ordered to close and people told to work from home if possible.
- Registers of Scotland temporarily closed application record.
- In person property viewings and valuations no longer available but ESPC agents adapt to continue providing key services.
Lockdown measures impact the property market
This week non-essential businesses were ordered to close doors and employees to work from home if possible. One major event in the property industry was that Registers of Scotland (ROS) had to close the application record, which led to the Law Society of Scotland (LSS) advising conveyancers not to complete property transactions until a further update from ROS.
However, ROS and LSS were able to set up interim measures which allowed property transactions to be completed later that week. But guidance from Scottish Government the following week advised that house moves should be delayed if possible anyway.
The restrictions put in place also meant that surveyors could no longer do Home Reports for most properties – in Scotland, most properties need a Home Report before they can be brought to market so this resulted in a significant decline in the volume of new property listings.
The lockdown measures also meant that in person property viewings and valuations were no longer allowed. However, more and more ESPC agents adapted and innovated to start providing virtual viewings and valuations so that people could still make a start on their buying and selling journey if they wished to.
However, as was to be expected, interest in buying and selling property dropped significantly this week with Google search volumes for property terms down to about 40% of the volume seen in previous weeks of the year.
This resulted in web traffic to espc.com dropping 40% this week compared to two weeks earlier, which is similar to the activity levels we would expect at Christmas. Similarly, there was a decline in Home Report, viewing and valuation requests.
Our newly established COVID-19 webpage with advice for property buyers and sellers became one of our most visited pages, highlighting people were looking for information and advice about the current situation in relation to buying property.
16th – 22nd March
- Start of social distancing measures – people advised to limit non-essential contact and work from home if possible.
- UK Government announces three month mortgage payment holidays.
Social distancing begins
The start of social distancing meant a change to most daily lives, with many taking the option to work from home and businesses starting to close their doors.
The social distancing announcement during this week also had an impact on interest in property, with key buyer and seller interest metrics on espc.com such as Home Report, viewing and valuation requests starting to slow, falling to less than half of the volume seen in the weeks before social distancing. Prior to this week the property market in Scotland had seen a strong start to the year.
During this week, the UK Government also announced three month mortgage payment holidays to help those struggling financially as a result of the Coronavirus pandemic.
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