Why it might be a pleasant change to live in slightly less interesting times

The old Chinese saying about living in interesting times could be matched in Scotland with another pithy one-liner: give us a break.

The interesting times to which the property market has been subjected within the last couple of years include the Scottish independence referendum, a UK General Election, the Scottish parliamentary elections and the looming Brexit referendum, not to mention the land and buildings tax and the prospect of further tax shake-ups to come next year.

It would hardly take a political savant to understand that investors and businesses, as well as property buyers and sellers, are feeling just a little bit punch drunk at the moment, and increasingly anxious for a healthy dose of stability.

Certainly, confidence is still low in historic terms and unease about the immediate future is heavy in the air. The events which are taking place at the moment, such as the Brexit vote, are genuinely historic and the implications – whichever way the vote goes – are momentous.

In Scotland, the elephant in the room is the prospect of a second independence referendum, possibly triggered by Brexit – a scenario devoutly wished for by some while viewed with abhorrence by others.

So the market is getting and giving mixed messages as participants try to read the political tea leaves in an attempt to figure out what effect imminent decisions will have on their prospects and those of their families.

It remains the case that there are active micro-markets within the different market sectors, influenced by local conditions, the fundamentals of supply and demand and, most of all, desirability – an attribute for which buyers will always dig deep.

In the east end of Paisley, for instance – never one of the main Scottish hotspots – three different styled houses in a pleasant street went within six weeks at sums in excess of £300,000. At the other end of town, 1980s-style houses and tenements seem to be languishing on the market for evermore.

Some recent upheavals have had a ripple effect. The oil price slump in Aberdeen and surrounds does not just affect the immediate area. Tens of thousands of people across Scotland are involved in the supply industry and their personal prospects have been hit as well.

Curiously, in Aberdeen and its hinterland we are unlikely to see too many casualties. While the blight of negative equity might descend on other areas, so much inherent wealth has built up in Aberdeen that many properties are cushioned, and might suffer a paper loss at worst.

The oil price is now edging up again, but that does not mean the worst of the pain is over. Many oil companies made so much money in the boom times that costs didn’t matter. That model has now changed, and the quickest way to cut costs is to lose people.

One of Aberdeen’s problems is oversupply – the obverse side of the coin from the rest of the country, where lack of supply is still dragging on the market like a sea anchor. The demand is there, but it is just not being met.

This is true of Glasgow and Edinburgh. There is a rich pool of people ready to move at the drop of a hat – but only as soon as they see the property that they want coming on to the market. Until then, they’ll sit tight – a classic symptom of a seller’s market.

However, matters are unlikely to significantly improve until the undercurrents of unrest and the widespread sense of confusion about the longer-term direction of the country are alleviated to a noticeable degree.

At the moment, there is a feeling of being in something of a commercial limbo, with decisions being put in abeyance until the political weather starts to clear. Or perhaps we are just in the eye of the storm.

What the market – and perhaps the country – needs at the moment is five years of stability, with a government committed to growth and a burgeoning economy in which wealth creators are encouraged and allowed to flourish.

Yes, we might live in slightly less interesting times, but at least it would give us a chance to catch our breath.

Eric Curran is managing partner of DM Hall Chartered Surveyors, based in the firm’s Glasgow North office.

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2018-12-18T10:48:27+00:00