What will happen to the Scottish property market in 2022?
ESPC's CEO, Paul Hilton, reflects on ESPC's 50th anniversary and looks ahead to what might happen to the Scottish property market in 2022.
2021 was always going to be a standout year for ESPC, as it marked our 50th anniversary. However, few could have foreseen the year we have all experienced. 2021, like 2020, was an unprecedented year for the property market – although in very different ways.
Post-lockdown, pent-up demand saw activity levels boom across Edinburgh, the Lothians, Fife and the Borders, as buyers sought new homes that accommodated a variety of changing requirements.
The housing market in 2021 experienced exceptional levels of demand unlike we have seen in recent times – but what is next after such a unique two years?
I don’t have a crystal ball, but I can offer some predictions into what we might see in 2022, and in the years beyond.
What might happen to the housing market in 2022?
At ESPC, we’re expecting demand to even out, to bring us a year that’s similar to what we saw in 2019 – that is to say, a healthy market that appears less frenzied than recent times, as we return, we hope to relatively normal, post-pandemic living.
This is, of course, assuming that there are no new Scottish Government interventions, like Help to Buy or the LBTT suspension earlier in 2021, which meant that we saw a very high level of sale completions in the first quarter of the year, as buyers tried to beat the deadline and make a saving.
We also assume that we will only see ‘modest’ Bank of England interest rate rises in 2022, to dampen the effects of inflation, but the effects of this on the housing market remain to be seen.
Post-COP26, a push for greener homes is also anticipated, with the UK Government already announcing a legal requirement for new-build properties in England to install electric car charging points in 2022. We wait to see if the Scottish Government will announce a similar scheme for homes in Scotland.
What might happen beyond 2022?
It’s hard to predict with any certainty what we may see in the next few years – after all, who could have foreseen 2020’s occurrences? However, there are some emerging trends that give us some clues as to what we might expect to happen in the medium to long-term for the Scottish housing market.
I believe that we will see some office spaces in and around Edinburgh’s city centre converted back to residential property, as demand for central workspaces declines. With so many beautiful buildings currently used as offices, this presents an exciting opportunity for more residential homes to come onto the market. Some empty retail spaces too, could also be repurposed to create new and innovative residential living.
On the theme of eco-living, I believe we’ll see a rise in popularity for ‘green’ mortgages. Put simply, green mortgages offer more favourable terms for homes that are more energy-efficient – surely a good incentive for many to make changes where they can.
There will also be more of a focus on how existing homes can be made more energy-efficient. This is a real challenge in a city like Edinburgh, where many properties are Georgian or Victorian, or have listed status, so it will be interesting to see how viable changes can be made or encouraged for homeowners.
