Vintage facades in Edinburgh
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New figures revealed by the BBC have continued to paint a picture of a U.K. property market where the underlying plates continue to shift: it’s no longer a story dominated by one area of the country. After all, traditionally, the market has been driven by London and the South of England, yet in recent times, house prices have been rising at a faster rate elsewhere in the U.K.
Just last month came the news that in May 2019, prices in London fell by 4.4%, their sharpest rate since 2009. That’s against a national rise of 1.5%.
Yesterday’s report presents more difficult news for the capital. Based on figures provided by Rightmove, it’s now taking 60 days on average for a seller to secure a buyer in London. Not only does that compare poorly to other areas of the U.K., it’s a dramatic turnaround from five years ago – when it took just 36 days.
In Scotland, things are moving in the other direction. Five years ago, it used to take 66 days to find a buyer. That’s now come down to 41 days. So what’s going on?
The answer: quite a few things.
In some respects, yesterday’s news is simply the latest sign of a growing North-South divide. In this case, it’s a gap that’s favouring the North more and more.
Here, activity and price growth are healthy. That’s especially impressive given the uncertainty surrounding Brexit – a major contributor to the slowdown in sales, not least in areas of the country that attract overseas investment. It’s also impressive considering recent political turmoil and a change of Prime Minister (although with new PM Boris Johnson promising stamp duty changes, some may now hold off to see if he’s as good as his word). In Scotland in particular, the new figures are representative of a market that’s seen buoyant activity and healthy prices.
By contrast, legislative changes have hit the South of England hard. Regulations affecting buying a second home (which now comes with an additional 3% stamp duty levy), and overseas investors (who now must be transparent when it comes to who is behind U.K. property investments), have inevitably hit London in particular.
Affordability has decentralised the U.K. housing market as buyers look away from the south to areas where house prices are more reasonable, but that doesn’t account for the growing time taken to find buyers. Granted, there was some slowdown following the 2008 financial crash as more stringent controls were put in place by mortgage lenders, but those same checks affect Scotland as much as they do London.
Instead, questions are being asked now about the digital infrastructure, and whether it’s providing adequate support to the market. This Tweet from housing market expert Henry Pryor suggests otherwise:
Long search times reported with Camden Council
@HenryPryor / Twitter
However, this is not a new problem.
Last year, the-then housing minister Heather Wheeler wrote to local authorities, telling them that extensive delays in completing conveyancing searches were “unacceptable”, and setting a target of 10 working days to turn such searches around. There’s precious little sign of that target being hit by the anecdotal evidence.
It’s not a London-only problem, either. Back in Easter, it was being reported that Derby City Council was taking nine works – 44 working days – to turn around searches.
It’s remarkable then, against this backdrop, that the market remains active, and prices continue to nudge upwards. But that’s just what’s happening, with consumers on the whole working with a damaged system rather than giving up altogether. But to fuel real, sustainable growth, a fully digitised system of searches that can hit the government’s own 10-day target – whether the buyer is in London or Glasgow – is surely now a priority.
The reduction in the time Scottish sellers are taking to find a buyer is encouraging, and it’s had an obvious knock-on in encouraging buyers, who know that the subsequent time to complete a purchase can be minimised. But it feels like it’s an area that’s – for once – the beneficiary of a postcode lottery, where the speed of returning conveyancing searches is linked to the efficiency of your local authority. Perhaps the answer does lie in the more streamlined, more transparent Scottish system – backed by a fully digital conveyancing search system.