Podcast: Were our 2024 predictions right and where do ESPC buyers come from?

Topics

In this episode of the ESPC Property Show, Paul and Megan return to discuss the Scottish property market's performance throughout 2024.

They revisit Paul's predictions from late 2023, analysing what came to fruition and what didn't. Key topics include the impact of interest rate changes, the challenges in the lettings market, and the unexpected increase in sales activity.

Paul and Megan also dive into the influence of the recent election on the property market and explore the trends in buyer geography across Scotland. Watch the podcast below for expert insights and a look ahead to what the rest of 2024 might hold.

Watch the episode here↓

 

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Key Insights

Interest Rate Predictions

Paul and Megan revisit Paul's predictions from late 2023 regarding interest rates. Paul predicted that rates would start to drop around May or summertime, which turned out to be accurate as the Bank of England reduced rates by 0.25% in July 2024.

Lettings Market Challenges

Ongoing challenges within the Scottish lettings market remain, including the continued tightness due to limited supply and rent caps. Despite some changes, such as slight modifications to rent control policies, there remains a significant shortage of rental properties, particularly those priced under £1,000 per month.

Sales Volumes and Market Activity

Contrary to Paul’s more cautious prediction, sales volumes have increased significantly, with a 22% rise compared to the previous year. The increase is attributed to more stock being available, sellers being more realistic with pricing, and overall increased market activity. This surge in sales was unexpected, reflecting a strong demand despite economic uncertainties.

Property Bargains

While average sales prices remain similar, the premiums over home report values have decreased, meaning buyers aren't paying as much over the asking price as they did before. This is partly due to the increased supply of properties and more choice in the market.

Return of Property Chains

With the return of property chains, where the sale of one property depends on the sale of another, the buying process in Scotland has become more complicated. This emphasiszes the importance of first-time buyers who can break the chains.

Impact of the Recent Election

Although housing is a devolved issue, the election results could influence policy directions, especially regarding housing supply and rent control. Although there haven’t been any radical changes in the housing market from a political point of view, we may see some softening of policies in the near future.

Geographic Trends in Property Buying

Discussing insights from our recent report on “where ESPC buyers come from”, we can see that a significant percentage of buyers in areas like Edinburgh and the Borders are local residents. This interesting data challenges the assumption that many buyers are from outside Scotland or abroad, highlighting the strong local demand for property. Read the report here.

Market Outlook and Future Predictions

Paul offers his prediction for the remainder of 2024, expecting the market to remain strong, with another possible interest rate cut before the end of the year. A critical challenge for the market for the year ahead will be addressing supply issues.

 

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Where do ESPC buyers come from

We look back at the property market from January 2019 to July 2024, taking into account where buyers are currently living when they purchase an onward property, and examining how buyers relocate, as well as exploring how many buyers come from outside of Scotland and indeed, outside of the UK too.