The residential property market in Tayside and Fife has continued to perform strongly in the first six months of this year. Local estate agents have reported a high level of activity with many properties going to Closing Dates within a few weeks of marketing. Some properties have sold for in excess of 10-15% above the Home Report valuation. There has certainly been confidence in the market in this area.
It is fair to say however that the market has been affected by a lack of supply. Property listings in the TSPC and other property portals are running at lower levels than in both 2020 and 2021. Many buyers chasing fewer properties has certainly been good news for local property sellers.
Another common feature this year is that some clients are choosing not to put their properties on the market for sale until such time as they have secured a property to buy. This has resulted in clients submitting (often at Closing Dates) an offer which is “subject to sale”. In the case of an offer submitted subject to sale, the normal position is that a seller would give a buyer a period of four to six weeks to market their property and then receive an acceptable offer. During that time a seller withdraws their property from the market so no further viewings are permitted. It has to be accepted however that a seller will often want to avoid this scenario if they can and will often be more inclined to accept an offer without any conditions, even if it is slightly lower in order to guarantee their sale.
Most estate agents have witnessed a slight decline in property activity during the summer holidays and this was in fact a regular feature of the market before the Covid 19 pandemic. Traditionally however the property market then bounces back when children return to school and parents go back to work leaving the summer holidays a distant memory. The question however is whether we will see this trend in the last half of 2022?
It will be interesting to see to what extent the local market is affected by the economic uncertainty in the months which lie ahead. I was a Partner in Dundee when the credit crunch in 2008 decimated the local property market. In 2008 the market had been exceptionally strong however the credit crunch resulted in increased unemployment and property re-possessions. It is fair to stay that at the time property prices more or less fell off a cliff. At Thorntons we do not see a decline similar to those credit crunch years but we do expect that activity will be affected by the cost of living crisis over the next few months. A great deal is likely to depend on the extent to which the UK Government (and the new Prime Minister) assist the general public with spiralling gas and electricity bills.
The local property market is resolute with plenty of buyers still out there, and provided unemployment remains relatively low the market should remain active in the second half of this year and into 2023.
