Will House Prices in Edinburgh and the Lothians rise in 2020?
The festive season is in full swing and the winter weather is making itself know which means that, with 2019 almost at an end, it is time to dust off the crystal ball and take our annual look ahead to what the property market has in store in 2020. Before doing that though, let‘s quickly look back at the what happened in the property market in 2019.
A Look Back at 2019
As we entered 2019, much of the talk was about what impact Brexit would have on the property market. It was a question that would persist throughout the year as the date when the UK was to withdraw from the EU – originally scheduled for 29 March 2019 - was pushed back not once, not twice, but three times.
In spite of this, activity amongst those buying and selling properties in Edinburgh and the Lothians was consistently high during 2019. Generally speaking, during times of significant political or economic uncertainty people will delay major decisions like moving home however there was little evidence of this being the case in the local property market. In fact at Warners, we have seen property sales and listings rise by more than 20% compared to 2018, and to their highest level since the credit crunch over a decade ago.
The attitude amongst homemovers in Edinburgh and the Lothians has generally been that they can’t put their lives on hold awaiting the outcome of Brexit and, buoyed by the strength of the property market in recent years, they decided to take the plunge and get their home onto the market.
Despite market activity being at its highest level in more than a decade, house price inflation during 2019 did not spiral to unsustainable levels. Latest figures from ESPC show that the annual house price inflation in Edinburgh was just 0.1% in the three months to November, thanks in large part to a rise in the number of homes for sale in the city.
What Will Happen to House Prices Next Year
As we look ahead to 2020 the market is, as was the case 12 months ago, facing up to the prospect of Brexit. The difference this time is that, due to one party in Westminster now having a clear majority, a deal is likely to finally be agreed and the withdrawal process will begin.
In the short-term however, the impact on the local property market is unlikely to be significant. Buyers and sellers have been dealing with Brexit-related uncertainty for over a year now but it has not deterred either buyers or sellers.
Although matters should progress in the new year, the fundamentals underpinning the market are unlikely to be affected in the short-term. Unemployment rates remain low by historical standards, confidence amongst buyers and sellers is high and interest rates are low, making mortgages more affordable. Despite all of the discussion about Brexit, most of the larger, macroeconomic impact of the changes it brings will be realised over a timeframe of years rather than months.
As a result, the expectation is that market conditions in 2020 are likely to be similar to those that we have witnessed over the last 12 months. The number of homes being bought and sold in Edinburgh and the Lothians should be in line with 2019 levels with house prices inching up only slightly due to the current equilibrium between supply and demand.
If you are interested in buying or selling a property or if you have a question about the market, get in touch with Warners today on 0131 667 0232 or by emailing email@example.com.