It has taken more than a decade, but home sellers in the south side of Glasgow are in the mood to party like it’s the year 2007 as house prices climb past levels last seen at the previous peak of the market.
Activity is strong and brisk, with a continuing lack of stock ensuring that most properties are flying off the shelves. Well looked-after homes in good areas in proximity to the city’s better schools are particular prizes.
In consequence, houses which are marketed properly and placed at the right price are more often than not going to a closing date and, as a result of the competition, achieving figures of 10% and more in excess of the Home Report valuation.
It is very much a seller’s market, with many more people looking to buy than there are properties available. Agents across the South Side are having to cope with a remarkable shortage of housing stock.
Of course, to achieve these kind of happy results for sellers, all the factors have to work in their favour, with timing, pricing and marketing all set at optimum levels.
Closing dates have almost become the norm for good flats in Shawlands, the South Side’s answer to the vibrant West End. Earlier this year it was named in a London newspaper as one of the most desirable places to live in the UK.
And it is not hard to see the argument. As well as good, solid tenement accommodation, the Kilmarnock Road corridor has had something of a mini-revival, with fine dining and casual restaurants, cafes and clubs. Pollok Country Park, featuring the famous Burrell Collection, is but a hop, step and a jump away.
In the short term, there is little reason to see this upward trajectory stalling. People will continue to want to find something they are keen to buy before they consider selling, creating something of a vicious circle. The market is also still slightly artificial, with continuing low interest rates.
The eye-watering levels of Land and Buildings Transaction Tax at the upper end of the market have had some impact. Homes priced in excess of £1,000,000 are considered by only a very small pool of potential buyers.
But it would be an exaggeration to suggest that the dearth of activity in high-end properties is realistically causing a serious logjam further down the pricing chain. Good family homes up to £500,000 are still selling well in most areas.
Hotspots in the flats market remain Shawlands and Battlefield, both lively urban villages. In the house market, properties are going like hot cakes in established residential areas such as Clarkston, Giffnock and selected parts of Newton Mearns. Access to perceived good schooling is vital.
Languishing areas include Govanhill, though it has recovered slightly. There are some sales, particularly in refurbished properties, but prices are still miles away from 2007 levels. Sales are being achieved in Govan. Like everywhere else, the key is realistic pricing.
Buy-to-let landlords came away from the market in recent times, but as tax impositions become an accepted cost of business, we are seeing some return – with rentals rising to recoup increased outlays.
A one-bedroom flat in good condition in a respectable street in Shawlands could be expected to bring in £140,000 – £150,000 in this market, up from just £125,000 to £130,000 a year or two ago.
In the suburbs, a three-bedroom semi-detached is now likely to fetch upwards of £250,000, up from around £220,000. Pricing of stone-built detached house in districts such as Pollokshields has not shifted as much, hovering around upwards of £750,000.
New build activity is popping up all over the south side in places such as Cambuslang, East Kilbride, and Newton Mearns assisted by Help to Buy incentives. The market is buoyant and the builders are definitely back.
Steven Graham is a residential partner at the Glasgow South offices of DM Hall, one of Scotland’s leading firms of Chartered Surveyors.