Nothing hurts the property market like uncertainty. A Yes vote for the referendum on Scottish independence would have brought about a lot of challenges for property investors, but the uncertainty regarding Scotland's future was enough on its own to quell activity on the market.
Fortunately, that period of uncertainty has come to an end and analysts are predicting an upswing in the Scottish property market as a result. In an article published in the Guardian in April 2014, it was reported that Savills had predicted a 25% increase in property prices throughout Scotland if the referendum resulted in a 'no' vote. That prediction looks close to the mark, as activity in the Scottish property market has begun to heat up following the announcement of the results.
What would a Yes vote have entailed?
Concerns arose from what independence might mean for Scotland's job market, currency and property legislation. In April, it was reported that certain companies, particularly financial firms, would consider relocating in the event of a Yes vote.
The lack of job stability, together with the potential disruption to the economy, would have put off many home buyers. Furthermore, according to This is Money, a Yes vote would have meant that housing mortgages would remain in sterling, which would have made them more vulnerable to fluctuations in the market.
With this in mind, many recent property investors insisted on including clauses in their contracts that released them from all obligations in the event of a Yes vote, while others simply pulled out of deals altogether. Scottish house prices, which were reported to have reached a record high in July and had even surpassed their pre-financial crisis peak of June 2008, stagnated in the period leading up to the referendum as buyers held off, fearing the repercussions of a Yes vote.
The Impact of the No vote
The No vote has initiated an immediate turnaround in the Scottish property market, as buyers who were holding back in anticipation of the results of the referendum re-enter the market with renewed vigour.
The impact is already being felt on the property market. Blair Stewart – a partner in charge of Edinburgh property at estate agents Strutt & Parker – claimed that two £1m deals that were thought lost a week before were now back on the table, as the buyers in question returned encouraged by the result of the vote.
His experience mirrors that of many involved in the Scottish property market. Ran Morgan, head of international estate agents Knight Frank's Scotland operation, predicts that prime values will rise by 3 per cent by the end of this year and by 3 to 6 per cent in 2015.
Others are not so optimistic, fearing that the sudden flurry of activity could have a disruptive effect on the Scottish property market. Some also worry about the implications for property taxation. But for the most part, there is a sense of optimism and renewed confidence as the uncertainty brought about by the Scottish independence referendum is finally resolved.
If you're wondering whether or not the time is ripe for you to invest in Scottish property, be sure to contact the experts at Tepilo for professional advice.