Another hugely eventful year draws to a close, but what have we learned across the construction, architecture and property finance sectors during 2023? In this latest article in our Insight series of in-depth analyses of all-things property, Queensberry Properties’ sales and marketing director, Hazel Davies, takes a look back over the year that was.
“After the seismic global events and political shocks of 2022, many people in the property sector were hoping 2023 would be a quieter year. While there has undoubtedly been less front-page drama, it’s been another tumultuous year for our industry. There are some encouraging green shoots of recovery across a largely subdued landscape, but once again, there’s a lot to reflect on as another year draws to a close”.
Number crunching
“This has been a year dominated by budgets – cost-cutting at home, book-balancing in government and balance sheet scrutiny at a corporate level. November’s Autumn Statement included headline-grabbing tax cuts, yet the government’s tax take from its citizens is still at record levels. This has filtered through into everything from disposable household income levels to the property market – the latter always uniquely sensitive to wider economic conditions. Queensberry Properties has enjoyed another productive year, but we recognise that new home completions are slowing as the impact of recent events becomes more acutely felt.
“Proponents of an 18-year property cycle insist that we’re years away from seeing significant house price falls, but there’s no doubt that sales and prices have levelled off. Price falls in Q1 this year were balanced out by a subsequent recovery, with Land Registry figures proving Scottish house prices have been more resilient than any of the other Home Nations. There is still a chronic shortage of housing across our cities and key commuter towns, inflating demand, but the twin impacts of higher mortgage interest rates and dwindling savings for deposits are increasingly throttling supply”.
Viewing the bigger picture
“It’s important to view today’s house prices in historical context, while recognising headline figures are comprised of innumerable micro-markets. Property in Argyll and Bute achieved an average selling price of just over £180,000 in the last year according to Rightmove – slightly up on 2022’s figures but still below their 1990s peak. By contrast, prices in Falkirk remained broadly flat over the last year but are now higher than their previous peak in 2020.
“Commentators often mistakenly view regional and national property markets as a single entity. Conflating widely varying figures or trends into a neat headline statistic fails to acknowledge the numerous local influences on prices in specific postcodes. Edinburgh is a perfect example. Entire new suburbs are being constructed beside Gilmerton and Edinburgh Gateway, which may help to alleviate housing pressure across our capital. The completion of the tram extension to Newhaven back in June might also serve to recalibrate local micro-markets, providing areas like Leith and Newhaven with far better connectivity, yet fluctuations here wouldn’t necessarily be identified even in Edinburgh-wide house price summaries”.
Future perfect?
“Looking ahead, we seem set for a changing of the guard at Westminster in 2024. A new (though not New) Labour government could upend the last 13 years of housing orthodoxy, hopefully ensuring more political continuity. There have been 16 different housing ministers since 2010, none of whom remained in post long enough to tackle acute issues like our increasingly dysfunctional planning system. Housing needs to be viewed as essential infrastructure, subject to long-term targets and masterplans, rather than a short-term vehicle for headline-grabbing promises that will never be fulfilled by a revolving door of ministers.
“The Labour Party intends to usher in a fresh generation of New Towns, while Sir Keir Starmer has also pledged to build Georgian-style townhouses in urban areas, replicating the five-storey buildings so symbolic of Edinburgh’s first golden age. Greater political stability after the General Election should help to usher in a period of subdued yet stable economic growth, hopefully engendering a period of calm for the property market. It’s been a long time coming”…
