“In 2022 we expect sales to continue facing a market shortage and spikes in buyer demand, while viewing requests for any property coming onto the market will remain very strong – the phenomenal growth in sales over the past 18 months looks set to continue. Robb Residential would advise anyone considering a move to take the first steps now in terms of selling, in order to be in position when the right property to buy comes along. Argyll and Bute, and other coastal and rural areas, will persist in their popularity as work-life balance remains a key pillar of the sales’ market.
Lettings will continue to see increases in rental yield due to a lack of available stock, with landlords reaping the rewards of increased demand, and upward pressure on capital value.”
COVID-led Demand for Country Living
As the pandemic persisted, the move from cities to more rural, less urban areas continued apace in 2021. Even before COVID-19 struck, Argyll and Bute had already hit all-time highs: according to Registers of Scotland data, come Q1 2019 the region, with its picturesque coasts and rolling, verdant farmland and hills, was experiencing record highs for quarterly property prices.
This coming year will continue to supercharge the market in this area with families and recent retirees – and younger buyers seeking to maintain new-found rhythms of daily work and life – targeting gentler times with plenty of space, fresh air and a more relaxed pace.
Hand-in-glove with the above, as those in urban and suburban settings added space and value to their properties by extending their home or adding a garden office, others with more time and cash looked to move from the cities and into the country.
Emerging from the pandemic, 72% of Robb Residential sales were to southern-based buyers, a 22% increase in that customer base compared to pre-lockdown: we expect this trend to continue, as many in the south leverage the same property boom in England, seeking to sell-up and move back home to Scotland, or to come north for the first time to avoid long, punishing daily commutes.
The days of bowler hats bobbing across Westminster Bridge are long gone, but for many in London, the Home Counties and the South in general the journey to work had become a daily scrum and battle of wits, tube, trains, buses and automobiles, affecting travellers’ health both physical and mental. At Robb Residential we know of daily commuters into the heart of London from the likes of Gloucester and Oxford which, with a missed connection or delay, could mean a three-hour journey between kitchen table and office desktop.
These daily odysseys are almost unheard of in Scotland, and as large corporations now seek to get employees back to the office, and organisations like Centre for Cities assess metropolitan futures, it’s inevitable that it will take a long time for any impact of COVID to unwind when it comes to city living.
Combine this shift with the large number of jobs available, and that – where feasible – remote working and flexible arrangements are now near the top of many people’s job-hunting agenda, and some form of urban flight will continue into and beyond 2022.
In the next year, providing there are no further variants materially impacting daily life, we expect the philosophical battle between remote and office working to be regularly in the news, but ultimately many white-collar jobs are going to require some form of blended working model for the foreseeable future.
City living for tenants, as well as the wider rental market in particular, will continue to see the impact of staycations, resulting in less stock availability combined with the pent-up demand for a continued need to have some access to cities.
In a recent edition, BBC Radio 4’s You and Yours reported CPRE – the countryside charity for England – saw a 1000% increase in short-term letting listings since 2015, and we expect this pattern to persist somewhat as people continue try to avoid the uncertainty of foreign travel, combined with the realisation that our own cities, countryside and shores offer a wealth of fun and experiences for a short break or family holiday.
The impact of these factors is manyfold: letting stock shortages in cities will remain, continuing to nudge up rents, and in the countryside the desire to offer short-term lets merely adds to the paucity of quality properties for sale as buyerscontinue to look beyond high-populated areas for a home.
“In sales 2021 was a year of enormous demand, with a sharp rise in the number of properties sold and significant increases in the average selling prices across all areas. We saw big changes across the entire West of Scotland, with homes selling much faster for significant uplifts in comparison to Home Report valuations. Rural and Coastal properties doubled their number of viewings.
Lettings was also an interesting year, with a combination of students returning and COP26 ensuring stock was low and average yields increased – the Q3 & Q4 surge in activity has carried through to the present day.”
Iain Robb, Director, Robb Residential
In the UK House Price Index Scotland 2021, the country out-performed the rest of the UK, achieving an average increase of 12.3% by October, with detached properties enjoying their own boom with an increase in value of 16.6%.
Between July 2020 and July 2021, the volume of sales in Scotland more than doubled. Robb Residential believe Scotland represents a unique proposition: easily accessible countryside from its two main business hubs and centre of Government and finance, Glasgow and Edinburgh, along with easy access to Aberdeen, Dundee and Inverness, as well as a range of robust provincial centres and commuter towns.
In some areas letting stock dropped by over 50%, especially in urban centres as students drove a focused return to cities. The lack of stock and its flipside (pent up demand from students who’d been at home and / or remote learning for a year-and-a-half) meant that rental yield rose as the boom in capital value continued: like Downing Street, some landlords could have their cake and eat it.
The pandemic has led to tectonic shifts in the cadence of life and leisure. By way of two examples, golf participation is up massively; and in motion pictures, studios continue to release films to both streaming services and cinemas as viewers enjoy watching at home whilst delaying any en masse return to the large complexes.
These types of cultural shifts were reflected in wider outlooks – at one point in 2021 job vacancies numbered more than1,000,000, as available posts rose by over 40%, illustrating that real and seismic macro-economic factors will linger, and we should not expect a reversal any time soon.
In simple terms, the pandemic has been cause for many to seek increased flexibility and security, whilst pursuing other opportunities that, most likely, would otherwise not have been considered.
Many of the changes we see now in our business and private lives will remain, and for the foreseeable future this principle should translate into a continued boost for the housing market as people continue to reconnect with their homes and local areas, whilst pondering new horizons in their daily working and domestic lives.
The spectre of inflation looms, too. Whilst we can expect interest rates to creep up, and inflation to put the squeeze on the cost of living, the pandemic-led drive to enjoy ourselves at home, whilst leaving many cash rich, could see in 2022 little impact on the housing market.
For two years the entire UK population has practised a serious shift in discretionary spending, and we believe short-term creeping inflation will refocus people’s minds on what they need and want, and that many of those things can be had on their doorstep.
For now, those most impacted by inflation are not yet active in the property sales market. The current Bank of England forecast sees inflation rising, then starting to fall as the shorter-term impacts of the pandemic – disrupted supply chains and raw material price hikes – start to fade.
Playing devil’s advocate, it’s hard to see at the macroeconomic level how it’ll all play out eventually, but we do know that central banks in major economies will be doing their best to keep inflation under tight control, and that the days of it being rampant should be over. But, as the old joke goes, if you put ten economists in a room, they’ll come out with 11 opinions.
Robb Residential still expect significant numbers of Scotland-based city dwellers to migrate, as southern-based national and international buyers – mainly “lifestyle changers” – continue to seek out a different pace and better qualities of life in western rural and coastal Scotland, with Argyll & Bute remaining a firm favourite.
Fired by 2020, throughout 2021 the desire for better, more homely, outdoor living became common. As we appear to be heading back to the office some of the time, hybrid working models can be expected to give employees more flexibility as companies rationalise city property footprints, ensuring suburban, countryside and rustic living should be as desirable as ever.
In the 12 months to now, Robb Residential have sold over £56,000,000 worth of property, and we’ve achieved an average yield increase of 5% on lettings. That’s a lot of happy homeowners, buyers, and pleased landlords.
With our 100+ years of combined experience in property, and with our principal Iain Robb’s long history of operating in these desirable marketplaces, Robb Residential are very well-placed to be your agent of choice in 2022. We offer true agency skills and advice: we don’t just promote and sell your home; we find the right buyer at the right price.
Robb Residential are an Estate Agent based in Glasgow who deal in a range of unique and beautiful properties in the middle-to-prime market in Scotland. For more information, please contact us, email or call on 0141 225 3880.
Note: statistics, percentages and references are correct at the time of writing.