With around 1 in 2 Fife house sellers actually selling their home in the last month, Fife sellers and buyers will need to continue to be pragmatic if the surprisingly strong current levels of activity in the Fife property market are to be sustained.
To start, we had the once in a lifetime event of the credit crunch in 2008, we then had another once in a lifetime event with the Brexit vote in 2016 and now the mother of all ‘once in a lifetime’ events, Coronavirus in 2020 – three once in a lifetime events in the space of 3 Olympic Games!
The doom-mongers forecast that the British property market would drop like a lead balloon on the scale of the 1989 housing crash (where property values dropped by 30.87% in a couple of years) but would be nothing compared to the tsunami that was Covid. Yet in the first 75 days of the property market coming out of lockdown, behavioural and economic changes mean that many Fife homebuyers are now even more dedicated to moving home and the Fife property market is doing quite well.
Going into lockdown, the effect on activity in the Fife property market during those three months was expectable and predictable as it was placed in suspended animation during April, May and June. When the Fife property market re-opened in late June, nobody predicted what happened next. Of course, many of us in the property industry estimated some release of pent-up demand from the Boris Bounce, yet nobody anticipated such a ricochet in activity in the Fife property market.
This is particularly interesting when one considers GDP dropped by 20.4% in Q2 2020 (fascinating when compared to notable historic times when it dropped by 13.8% in WW2 and 16.7% in WW1), yet amidst the largest contraction in the UK economy ever in a single quarter, what wasn’t expected was an increase of potential property buyers and sellers wanting to move post-lockdown.
Some have cited this boost to the property market on a number of factors. Firstly, we have had the Stamp Duty Holiday, others have pointed at the never seen before 0.1% Bank of England base rates making mortgages cheap, then we had the furlough scheme which protected so many jobs and finally, the pent-up demand from the Boris Bounce.
Yet, when one actually talks with Fife buyers and sellers, whilst all of them cite one or two of the above reasons, all of them mention and talk about how the lockdown has made them re-evaluate and reconsider how they want to live, their work-life balance and where they want to live. This is also reflected with tenants changing their requirements when looking for a property to rent (so Fife landlords – be aware of this).
Demand for apartments in the centre of Fife has eased off, whilst demand for property with a good-sized garden or other outside space has increased. One question we get asked all the time is also the broadband speeds, although they are quite decent in Fife (the average broadband in our local Council area being 41.0 Mbps download and 7.9 Mbps upload).
So, with record numbers of Fife properties coming on to the market – is it boom time for Fife homeowners?
Of the 901 properties that have come onto the market in Fife over the last month, 420 of them have agreed a sale
(a percentage of 46.6%)
That means around 1 in 2 Fife people that have placed their property onto the market have not found a buyer yet.
Yes, the Fife property market is good, yet the number of people who have placed their property on the market has also gone up. Fife estate agents have never been so busy putting property on the market and I feel sorry for the chap who is putting up all the for-sale boards – his wife hasn’t seen him in daylight for weeks!
But that does mean you are in competition with so many other properties on the market (the number of properties coming on to the market typically at this time of the year is about a third to half less). The Stamp Duty boost ends in March 2021, so that means you need to have found a buyer by November at the very latest. By over egging your asking price, to test the market, might mean you will lose out on this hiatus and could end up missing the boat!
The prices being achieved for the Fife properties that have been selling have been fair and realistic and have stood up much better than many were originally predicting.
Yet as the country looks forward, given the ambiguous nature of the outlook for the British economy and the possibility that Covid-19 may be with us for a little while yet, I must implore Fife property sellers to be realistic with their asking price so a greater number of you who want to make the move, are able to do so.
Roll the clock back 20 years and any self-respecting late 20/early 30 something would never say on their first date that they lived with their mum and dad. It was seen as a sign of immaturity being tied to your mother’s apron strings with as a failure to leave the family home. Yet over these last two decades, the age of leaving home has been increasing steadily from 20 years and 11 months in the late 1990’s to 22 years and 7 months today.
However, as with all the stats, the devil is in the detail. Although the age of leaving home has only risen by 8% between 1997 and today, those that didn’t leave home in their early 20’s tended to stay much, much longer.
In 1997, 11.26% of 25 year old to 34 year old still lived at home with their parents,
yet last year that had risen to 15.74%, an increase of 391,000
‘stay at home’ Millennials
However, before we deride these Millennials for still being tied to their mother’s apron strings, I would say those very same Millennials (the mid 20’s to 30-year olds) have been pragmatic, being attracted to sacrificing independence in order to achieve their long-term life goals as they have seen rents rise and an inability to save for the mortgage deposit. All of this has seen the first-time buyer levels in this millennial age range rise for the last three years … so good news for everyone!
However, is all that about to change?
Just as mum and dads in Fife had thought their late 20 something/early 30 something offspring had flown the nest, Covid-19 has blown some Fife ‘chickadees’ back into the nest. Back in March, the lockdown saw many Millennials flee the big UK cities, with their constrained and poky shared HMO’s and flat shares, swapping their city centre private rented home for their parents’ Fife home.
Yet with lockdown lessening, it isn’t just remote workers who are unenthusiastic and disinclined to return to the big cities (fearful of a second lockdown) – many of these Coronavirus blow-ins are deciding to stay put too! A recent YouGov poll asked Millennials of private rented homes what their plans were and 1 in 6 tenants planned to hand their notice in on their rented home and fly back to the nest of mum and dad. The advantages are quite plain, especially as it could enable them to save for a deposit to buy their future home.
There are 160,952 households in Fife, made up of 51,239 single person households and 102,428 family households
(the remainder being made up of shared houses etc.)
Yet how many of those Fife family households had non-dependent children before Covid-19?
15,958 Fife households have children
that haven’t flown the nest
That’s 15.6% of Fife families whose kids are still to leave home … and it’s only going to get worse!
So, what does this mean for Fife homeowners and Fife landlords?
It will mean that Fife parents and their children will get to know each other better, build stronger relationships and it will enable their children, if they are wise, to save for their deposit for their first home purchase – who knows maybe in Fife, as working from home could become the norm.
Also, with remote working, many tenants are looking for properties with bigger gardens which could translate into greater demand for property with bigger gardens? It will also change the property needs of those Fife parents and potentially could mean instead of those parents moving down market, they could end up staying longer or moving up market?
Now of course these polls could be a load of hot air? What I do know is that this thing has not played out yet and only time will tell if this will make a concrete change to the way people live, rent and buy property.
These are interesting times and thank you for reading this. Do let me know your thoughts on this matter.