The UK entered its second national lockdown on 26th December. Unlike the first time around, in the 2nd lockdown both the the U.K. and Scottish Governments have allowed the viewing of properties for both rental and sale sectors to continue to operate with in-person viewings permitted under strict Covid-19 hygiene protocols.
The inevitable dip in public confidence during this highly infectious phase of the Pandemic has seen the number of viewings for both the rental and sales sectors reduce significantly, however.
Rental market
Following the end of the national Lockdown in June 2020 we saw a sudden surge of activity as the property market was given the 'green light' to re-open. This resulted in a dramatic increase in stock levels.
Couple this with a significant influx of short-term rent ‘Air BnB’ properties into the long-term lettings market. This was due to the hugely decreased demand on holiday lets during the pandemic and also the impending proposals by the Scottish Government to better regulate the previously unchecked ‘holiday’ lets market. This all resulted in a temporary oversupply of rental stock in Q3 of 2020.
Source: Umega Lettings
The knock-on effect of this were rental prices dipping on average 4.1% from pre-covid levels in some areas. Landlords have also experienced longer void periods as the greater stock levels meant longer times to let properties.
Source: Citylets
With the oversupply of rental properties decreasing through September-December, agents generally now expect a sharp upturn in buyer activity following the anticipated end of the lockdown and a subsequent gradual correction in prices back to pre-covid levels.
Source: Citylets
Source: Citylets
Sales Market
Source: Umega Lettings
In contrast to the rental market, the pent-up buyer demand following lock down No. 1 has meant that the sales market experienced a record number of transactions in the period July-September 2020. Thereafter we encountered a steady dip in transactions as buyer levels reduced to more sensible levels into Q4 of 2020.
The average number of days taken for a property to sell has been uncharacteristically high due, in part, to the backlog of cases accrued by legal firms and lenders as a result of the rocketing numbers of transactions being processed.
Source: Umega Lettings
This backlog has been further exacerbated at the start of 2021 by the rush for buyers to complete before the end of the Land and Buildings Transaction tax (LBTT) holiday ends on 31st March 2021.
Property prices, however, have quickly settled back to pre-covid levels in Q1 of 2021 as buyer demand wanes due to less pent-up demand but also the uncertainty of the economic outlook plus a perceived reduction in buyers' affordability and ineligibility to obtain lending.
Property stock would be expected to rise again once lockdown restrictions are lifted in late February or March.
Edinburgh Average House Prices - Source Citylets