A number of experts with experience of the Scottish property market have stepped forward to suggest that a recent lull in activity could be very positive for long-term investors. As you might expect in light of the Brexit vote, the Scottish property market has suffered from falling sales over the last two months. This reduced demand for property is obviously impacting prices which have shown signs of softening.
While politicians will no doubt blame the uncertainty surrounding Brexit it is also worth noting higher stamp duty levels are not helping the situation. So, what can we make out from the confusion and volatility since the EU referendum vote?
Buyers markets emerging
The north-east of Scotland has benefited enormously from the previously healthy oil and gas industry. The fall in the price of oil over the last 12 months, although it has picked up slightly, has impacted the likes of Aberdeen and now we have the Brexit situation to contend with. There is a growing consensus that prices may have fallen too far too quickly and first-time buyers, or those looking to move up the property ladder, may have a very useful window of opportunity.
The bottom line is that you will never buy at the bottom of the market as you will never sell at the top of the market. If you can acquire property at a level from which you see long-term value then it may be worth researching this further. One of the many skills associated with property investment is to see beyond the short to medium term concerns and remain focused on the long-term picture.
This week we have seen a multibillion-dollar takeover of UK technology group Arm Holdings which may well have been “speeded up” in light of the recent fall in the value of the pound. This is something which property experts have been focusing upon more and more because UK property over a relatively short period of time has become very attractive to overseas investors. This will offset some of the postponed purchases from investors south of the border and if Scotland was able to secure a long-term position within the European Union, as the rest of the UK exits, this would make Scottish property an even more attractive proposition.
It is very easy to pick holes in the move towards Scotland independence and continued negotiations to join the European Union in place of the UK. However, in reality it is only the Scottish government which has really stepped up to the mark amid confusion and mayhem across the English political system.
Scottish house prices
Despite all of the doom and gloom it is interesting to see that Scottish house prices have in fact moved higher over the last few months. There may be a period of uncertainty and price stagnation/reduction in the immediate short-term but there are a number of reasons to remain positive in the longer term. We can also expect not only the UK government but also the Scottish government to inject further fiscal stimulus into the Scottish property market while recent developments are digested.
The re-emergence of first-time buyers, taking advantage of concerned sellers, is certainly a breath of fresh air.