THE COVID PROPERTY PRICES BONANZA

Homes selling for 10% above market value in post-lockdown ‘rush’

HOUSE prices are soaring in Scotland with the property market surging back to life following months in lockdown.

Some property types are selling for 10 per cent above home report value, estate agents say.

Demand is so great that experts are predicting this month could set a new record for the number of houses sold.

After lockdown saw the market at a standstill, the end of restrictions has prompted an ‘unprecedented’ rise in viewer numbers.

The market is fuelled by months of ‘pent-up demand’ from buyers within Scotland – but also by a rush of interest from potential purchasers from elsewhere in the UK.

Fears of a second wave of Covid have lead to a growing demand for properties with ‘lockdown-ready’ features such as gardens, a home gym and a home office.

The strongest price rises seen by estate agents are for family homes and character properties in upmarket suburbs of Edinburgh and Glasgow, as well as for luxury flats and townhouses in the heart of the capital’s New Town.

Agents report that the fastest selling properties are typically homes in rural areas and town suburbs.

Previously, estate agents were worried that the end of lockdown would coincide with a slump in prices. One leading agency which had predicted the pandemic would result in the value of homes dropping by up to 5 per cent admitted it was ‘coming round to reviewing’ that advice.

Analysts say that they are seeing the results of three months of ‘pent-up demand’ as potential buyers were denied the chance to view and buy properties.

In April, there were 103 house sales in Scotland – against 5,765 in March and 6,287 in February.

It is hoped that this month could break the record of 10,352 completions, which was seen in July 2018.

Part of the rise in the number of sales is due to a backlog of transactions which was started before lockdown but has only concluded now restrictions have been lifted.

Estate agents are also detecting a significant change in buyers’ requirements, with many from London and the south seeking a ‘lifestyle change’ after lockdown.

Cameron Ewer, head of residential for Savills, said: ‘It is unprecedented. The number of new people registering to buy with us is up 143 per cent on this time last year.

‘Viewings are up by 164 per cent. Deals agreed are up 300 per cent.’

Highlighting the demand for open spaces, Mr Ewer said interest in an island in Loch Lomond was ‘off the chart’ since it was advertised for £500,000 two weeks ago.

He added: ‘People want to escape to the country. That is not just an urban myth post-lockdown. It is the reality. Interest in Inchconnachan

Island is off the chart. We are selling houses in Argyll which were slow this time last year.

‘We are also seeing a shift with buyers coming up from down south. They see Scotland as being attractive, with more open space than they are used to and affordable.’

Properties such as Inchconnachan can usually take months or years to sell but such has been the level of interest, a closing date has been set for August 11 – four weeks since it went on the market.

Research by Rightmove shows the total value of property for sale in Edinburgh is up 113 per cent on last year. In Glasgow, the increase is 109 per cent in 12 months.

Estate agent Rettie said activity had been so brisk the firm is ‘reviewing’ advice it had issued earlier, suggesting prices in the Scots property market could fall by between 1 and 5 per cent by the end of the year.

In a bid to stimulate the market in the wake of Covid, the Scottish Government temporarily changed the rules on property taxes, meaning there is no Land and Buildings Transaction Tax (LBTT) payable on sales below £250,000.

But John Boyle, head of research at Rettie, said: ‘I don’t think the temporary reduction in LBTT has had a great deal to do with it.

‘It’s more the pent-up demand of three months of inactivity and then everything gets unleashed.

‘Activity in the top end of the market usually begins in the spring, stretching into the summer months in the hope of finding a buyer.

‘That has gone this year. People have not been able to bring their property to the market until midsummer, so what we are seeing is a real rush.’

‘We are seeing a shift, with buyers from south’