Coronavirus COVID-19 and the impact on the Scottish property market: what we know so far
When lockdown restrictions were implemented in Scotland in March 2020 as a result of the Coronavirus pandemic, property market activity was severely impacted. Restrictions meant house moves and related activities could not go ahead unless deemed “reasonably necessary”.
This very quickly resulted in property sales volume and the number of homes coming to market dropping to very low levels during the traditionally busy spring period.
However, when restrictions on the Scottish property market were relaxed at the end of June 2020, we saw a surge in property market activity, with lots more houses and flats coming to market and generally high competition from buyers for these homes.
The start of 2021 saw Scotland enter a new lockdown - however, house moves and related activities continued to be permitted. While fewer homes came to market, we still saw high competition for these homes, with rising selling prices and shorter selling times. In March 2021, we started to note an increase in the number of homes coming to market, possibly as a result of seller confidence increasing as restrictions are eased.
In this article, we assess the impact of the COVID-19 pandemic on the Scottish property market so far. You can also find out advice for property buyers and sellers during the Coronavirus pandemic.
There has been lots of speculation about what the Coronavirus pandemic means for house prices in Scotland. ESPC’s March House Price Report, covering the period from January to March 2021, revealed the average property selling price in Edinburgh, the Lothians, Fife and the Borders to be up 7.5% compared to last year.
The average selling price in Edinburgh also rose by 5.5% year-on-year.
When property market restrictions were eased at the end of June, there was a surge in the number of homes coming to market which continued until the end of 2020 - in the final quarter of 2020, the number of homes coming to market in Edinburgh, the Lothians, Fife and the Borders was up by almost 40%.
This is likely due to lockdown restrictions preventing people from selling during the spring, resulting in the busy activity we would normally see during this period being pushed back to the summer and autumn months. Our agents have also reported that many people realised during lockdown that their property was no longer fit for purpose. Whether they wanted a garden or simply more living space, this also led to an increased number of homes coming to market.
The start of 2021 saw fewer homes coming to market year-on-year. There could be a few possible reasons for this, including the strong start to 2020 in terms of property listings, the stay-at-home guidance and impact of home schooling.
There has been an increase in homes coming to market in March, possibly due to increasing seller confidence as lockdown restrictions are eased and pupils return to school. However, the decline in listings in March 2020 as a result of the pandemic will also be a factor in the year-on-year increase.
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During the lockdown restrictions in the spring, house moves were advised against unless “reasonably necessary”. This resulted in the volume of property sales falling to much lower levels than usual for that time of year.
However, one year on and it is a very different story. The volume of property sale in Edinburgh , the Lothians, Fife and the Borders in the first quarter of 2021 was up by over 55%. As well as reflecting how busy the market has been, this could be due to the LBTT holiday coming to an end on 31st March, resulting in buyers looking to complete transactions by that date in order to take advantage of the saving.
From January to March 2021, the median time for a property to be placed under offer in Edinburgh the Lothians, Fife and the Borders was 26 days, one day faster than last year.
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