Is the Tayside and Fife housing market cooling down?

By Maria Gran

April 26 2022, 5:58am

Estate agents Chris Todd, Jim Parker, Lindsay Darroch, Martin Paterson, Peter Ryder and Gary Robertson assess the current property market.

Will the cost of living crisis, global uncertainty and the weather cool down the Tayside and Fife housing market? We asked six property experts.

With demand consistently outweighing supply and house prices rising drastically, the property market has been exceptionally busy the past year.

At the start of 2022, local estate agents predicted house prices will rise between 2% and 8% this year.

The market continues to be hot, but there is reason to believe it will cool soon.

War in Ukraine affecting market

As supply and demand are out of sync, prices have continued to rise and properties are going for well over asking price.

Many sellers are also holding off on marketing their house until they have been successful with an offer, which further curtails supply.

Head of Gilson Gray’s Dundee office Lindsay Darroch thinks this will change soon.

Lindsay Darroch, partner and head of Gilson Gray’s Dundee office.

“At some point I expect the cost of living crisis, high energy costs, fuel costs, inflation and the war in the Ukraine to start cooling the number of purchasers,” he says.

“At that point I think we are going to see a sudden swing from a seller’s to a buyer’s market.”

Managing director of Thorntons Property Services Peter Ryder adds that rising mortgage rates, slightly more supply and global uncertainty will cause the market to cool down over the next few months.

This will lead to a slowdown in house price growth.

Will house prices stabilise?

Jim Parker, head of Fife Properties, says house prices will begin to stabilise across the country.

“As house prices rose dramatically over the last few years, surveyors have begun to find evidence of these for their home reports,” he explains.

Managing director of Fife Properties, Jim Parker.

“The same house from one year ago was now valued at the new higher amount.

“This in turn sets the new offers over level, but it’s what it costs to service the mortgage that’s important to the buyer.

“If they can’t afford it due to rising costs, they won’t offer more.

“We have now seen the average amount offered over the home report drop to around 9% instead of double digits.”

However, there is still competition in the market that drives prices up.

RSB Lindsays partner in Dundee Chris Todd says we are seeing a return to a “normal” market, but it will stay busy.

Many have moved to larger houses over the course of the pandemic.

“With banks still lending, people are still willing to pay a premium for what they like,” he says.

“We don’t anticipate that situation changing in the short-term, though we don’t expect prices to continue rising at the same rate as they have in the past couple of years.”

What homes are in most demand?

Heading into summer, more properties are slowly going up for sale. The housing experts hope this will balance out the market.

“As fickle as it sounds, the market can very much be driven or hampered by the weather conditions,” says Possible director Gary Robertson.

Gary Robertson and Laura Green of Possible.

“A lot of homeowners will only like to market their property when their garden is looking colourful and the grass is green.

“The prolonged colder and wet weather had a bit of an impact, but now we have really started to see a big increase in valuations and properties coming to the market.”

The Perthshire estate agent has experienced great demand for family homes and flats for first-time buyers.

Throughout Dundee and Angus, Blackadders has seen demand for terraced, semi-detached and detached family homes, as well as superior flats.

“We are entering the most buoyant time of the year and the contrast between supply and demand indicates there are many more buyers than sellers,” says director of property services Martin Paterson.

Low stock levels are pushing up prices in the property market.

“The challenge is to try and move the market forward with more stock coming to the open market.

“It is frustrating for potential buyers, with many people wishing to move, but nothing to move to.”

Newbuilds to help all buyers

In addition to property reaching the market due to the nice weather, more newbuilds will also help cool the market.

As more people buy and move into newbuilds, there will be a positive knock-on effect on the whole housing market.

head of RSB Lindsays’ Dundee office Chris Todd.

Mr Todd from RSB Lindsays says: “We have seen a good number of sales from people moving to these developments from older houses.

“Because newbuild prices are fixed, there is an attractiveness for many buyers who may be concerned about being outbid by those willing to pay that premium.

“The increasing new-build capacity is freeing up some supply elsewhere in the market, which is great as we see money flow in and around Dundee.”