By JOHN ROBERTSON
House sales in Shetland are already bouncing back from their lowest point in over five years with buyers returning to the market and expensive properties starting to shift again.
The upturn is making local solicitor firms and valuers busy after a spell in the doldrums. As we reported last week, the lowest number of residential sales in Shetland since the end of 2003 was recorded by Registers of Scotland for January and February this year. However, the dramatic slump actually took place several months before that, only showing up in the figures later due to the time lag between sales being concluded and eventually appearing on the official register.
The low figure of 33 sales on the register for the first two months reflected poor sales towards the end of 2008 but since New Year the tide has turned again with business picking up considerably, according to solicitors Dowle, Smith & Rutherford.
The upturn has yet to show in official figures but Registers of Scotland’s statistics for March, due out within three weeks, should belatedly reveal the resurgence.
Dowle, Smith & Rutherford’s property manager Robert Bell admitted business was still “not what it was” at its peak when demand sent prices rocketing during 2007 and early last year. The boom saw the value of house sales in Shetland more than double over two years, from £31.6 million in 2006 for 366 houses to over £64m last year for 355 houses.
An increase in the number of offers made recently for properties advertised by his firm suggests a recovery, including the return of the south buyers whose disappearance was the biggest contributor to the sudden slump in the Shetland market.
Mr Bell said: “We’ve seen that sort of people coming back a bit so [more houses] seem to be shifting. There was certainly a quiet spell in the last quarter of the year but I think we’ve not been as affected as other places.
“We are getting back to more normal numbers at the moment. I don’t have a crystal ball but there are encouraging signs so far this year that we are better placed than other parts of the country to weather the storm.”
The local industry was kept ticking over by a strong demand for cheaper properties, which was borne out by the average sale price in Shetland falling recently to £96,449, a level last seen two years ago. But properties priced over £180,000 are attracting offers again.
Mr Bell said: “What we noticed at the start of this year was the lower end – we were starting to shift them – but that is now filtering up towards the higher prices.”
Dowle, Smith & Rutherford’s website showed 47 houses for sale last week but only 27 of those were not already under offer and Mr Bell reckoned the list of properties advertised by local solicitors had also been cut quite dramatically recently.
Such is the recovery that he has taken the step of announcing that more properties were sold by his firm in the first three months of this year than in the same period for over a decade, although it is partly explained by the firm’s increased share of local house sales.
A sign of competition returning among buyers is that, according to Mr Bell, around 80 per cent of offers are at or over the asking price, following a period when sellers were having to settle for less.
He cited a renewed confidence arriving with the new year with help from very low interest rates. It may also not be as difficult getting a mortgage as some media commentators would have us believe. Agreeing with local valuer Stephen Johnston, he thought the media barrage of bad news about property and the economy over the past six-to-nine months spooked buyers out of the market, even though the Shetland economy has glided onwards relatively untroubled. But bad news saps confidence. “It takes a brave person to swim against that,” Mr Bell said.
Newly released figures show that council house sales in Shetland also fell last year, from 46 in the financial year 2007/08 to 37 during 2008/09. The large discounts of up to 60 per cent given to long-term tenants distort the statistics for private house sales by dragging down the average house price considerably.
According to SIC figures the average price for council houses across Shetland between January 2007 and last month was £40,614. Sale prices reached as low as £12,400 on average in Uyeasound and up as high as an average of £48,335 in Tingwall.