“The aroma of fresh coffee used to help sell a property – now it’s the smell of sanitiser!”
The chairman of Tayside Solicitors Property Centre (TSPC) expects property prices to continue to increase this year.
Hugh McKay has revealed the extent of the rise in demand for house moves at the end of last year.
He said the number of property sales increased by 35% in the final four months of 2020.
‘Surpassed all expectations’
Mr McKay, who is a partner at Lawson, Coull & Duncan, said the “resilience” of the property market was one of the few positives from last year.
“Despite the fact the market came to a virtual halt for almost four months last spring, the number of properties sold by TSPC member firms in 2020 decreased by only 11% compared to 2019,” he said.
“The figures for the final four months of the year surpassed all expectations.
“Registrations for the second half of the year increased by 38% compared to 2019, with total sales of £280 million.”
Change of priorities lead to moves
There have been several reports of properties in certain areas selling for well above their valuation.
Part of this is down to pent-up demand from the first lockdown.
Another element is people looking for house moves due to Covid-19 changing their circumstances.
Mr McKay said he had seen many customers had changed their priorities.
“This increase is explained in part by pent-up demand caused by the fact people were unable to move for three or four months,” he said.
“But that fact alone would not have seen the sales increase last for such a long period.
“The fact people have been required to spend longer in their properties has altered their priorities.
“It has encouraged them to look for new homes more in tune with their requirements.”
The smell of sanitiser
The current Covid-19 rules have not impacted the property market as severely as the first lockdown.
There has been the usual reduction in activity over the festive period, Mr McKay said.
Despite the ongoing uncertainty around the economy, the property expert anticipates prices will continue to rise this year.
“Provided banks and building societies continue to offer adequate funding opportunities, I anticipate the property market will remain buoyant,” the TSPC chair added.
“The market has adapted to accommodate the restrictions imposed by the pandemic.
“It used to be said an aroma of fresh coffee helps to sell a property – it might now be the smell of sanitiser!
“When the market reopened in the summer, it had possibly been anticipated that there would be pressure to reduce valuations which had been obtained several months earlier.
“That did not happen and I expect property values to continue to rise in 2021.”
Nationwide report shows growth slows
A report by Nationwide Building Society showed annual house price growth slowed for the first time in six months.
House prices were up by 6.4% annually in January, marking a slower increase than the 7.3% uplift recorded in December.
Property values dipped by 0.3% month on month. Across the UK, the average house price was £229,748.
Tax impact on house sales
A temporary increase in the nil band rate for stamp duty and Land Building Transaction Tax relief will end on March 31.
Robert Gardner, Nationwide’s chief economist, said: “To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday.
“While the stamp duty holiday is not due to expire until the end of March, activity would be expected to weaken well before that.
“The typical relationship between the housing market and broader economic trends has broken down over the past nine months.
“People’s housing needs have changed as a direct result of the pandemic.
“Many are opting to move to less densely populated locations or property types, despite the sharp economic slowdown and the uncertain outlook.”