This month I have been speaking with my good friend Grant Robertson, Chairman of Allied Surveyors Scotland who is one of the most respected property professionals within Glasgow. His knowledge of the West End property market is fascinating and I hope you enjoy his take on what is going on at present in our community.
“Not since the heady days of 2006 has the West End of Glasgow property market seen the level of competition for current on-market stock.
There are several reasons for this, but primarily Glasgow and indeed much of Scotland outside of Aberdeen is seeing historically low numbers of properties being offered for sale, allied to a growing number of purchasers shielded by the continuing ultralow interest rates being offered by ever more competitive lenders trying to push more product onto the marketplace.
For those of you who remember purchasing your first property over 20 years ago, the current offerings by Yorkshire Building Society, amongst others, must seem like a glimpse of Brigadoon.
When I bought my first flat in the West End of Glasgow in 1990 I was paying 14.7% to the then Leeds Permanent Building Society and as a first-time buyer I had to provide a minimum of 10% as a deposit.
Whilst much is made of the unfortunate position that first time buyers find themselves in now, mortgages are readily available up to 95% and even at this level deals with interest rates at less than 3% are readily available.
Even the much-flaunted mortgage market review failed to significantly curb lenders’ enthusiasm for lending and borrowers’ enthusiasm for borrowing.
This Holy Trinity of market factors – low stock, keen buyers and affordable money – has resulted in price spikes in existing sales often in excess of 10% of the Home Report Value, with the West End of Glasgow now sitting comfortably 10-15% above the pre-crash levels.
“When I bought my first flat in the West End of Glasgow in 1990 I was paying 14.7% to the then Leeds Permanent Building Society and as a first-time buyer I had to provide a minimum of 10% as a deposit.
“The issue for house buyers and house sellers is of course, will these price spikes become the established market, where vendors and surveyors price accordingly, or do we need to remain defensive of adopting these new levels onto freshly marketed homes?”
It has been long hoped that a revival of the house building industry, both private and social, would cool the buyers of house price inflation.
However, delays in delivering planning and building warrants allied to an ever more complicated and convoluted planning process has resulted in no discernible increase in the volume of house building in Scotland.
Numbers are certainly still very significantly short of the targets set by the industry and by Government.
I fear we will be into the downturn in the property cycle before many of the much vaunted large scale developments start coming out.
So, what is my advice to current home buyers and sellers?
Well, unless you are able to relocate your family or employment from the West End of Glasgow to Aberdeen, you need to budget prudently for what you might realistically expect to get for your existing property, or what you can borrow if you are a first-time buyer.
Ignore the chatter down the pub about some of the more outlandish sales that have been achieved, and set out your realistic purchase budget based on the Home Report Valuation and any local market evidence you can glean from your solicitor or estate agent contacts.
If you are going to “push the boat out” with your purchase make sure you consider the terms of the Home Report carefully with respect to any future expenditure that might be required.
Remember, as a cautionary note, those buying in 2007 have had to wait a decade to receive their purchase price back.
There is only a certain amount of time in a market where values can increase more quickly than salaries or peoples’ ability to borrow and therefore it might be wiser to pursue properties where there is less interest, rather than as was seen recently in Oban Drive where there were 30 offers for the one flat.
With regard to sales, look at setting your asking price around 10% beneath Home Report Value but certainly no more than 15% and look to achieve Home Report Value or slightly in excess depending on how the market is in your specific location.”
* Barry Walker has worked for more than ten years in Glasgow’s property industry – the last five in the West End where he lives.
During this time, he worked as an area director for a leading independent estate agency. Barry set up Walker Wylie with his business partner Stuart Wylie last year.
They say they “strive to deliver local knowledge, experience and the personal touch to online estate agency”.
For more information visit http://www.walkerwylie.co.uk