Agent identifies stock shortages even worse than UK average

A leading agent and market commentator says he has identified one part of the UK where the current stock shortage is reaching extreme levels. 

David Alexander - managing director of the Lomond Group-owned agency, DJ Alexander - says the number of properties available for sale in Scotland fell by between 31 and 47 per cent between January 2021 and the early part of this year. 

The only exception was Aberdeen where the fall in volumes was down just three per cent.

In many cities and locations - Stirling, Dundee, Glasgow, Paisley, Edinburgh and Perth - the falls were between 40 and 48 per cent. 

Alexander says that although falls in available property levels exist across the rest of the UK, in most of England these are in the region of 20 per cent. 

The exception is York where there has been a 61 per cent collapse.

Alexander comments: “Anyone involved with the property sector will already know that there is a severe shortage of properties for sale on the market and those that do arrive are being sold very quickly.

“The volumes have fallen across most of Scotland with the exception of Aberdeen which continues to be subdued and is likely to remain so for as long as there is no clear sign of what is going to happen with the oil and gas sector.”

He continues: “For the rest of Scotland it is something of a boom time. The increase in interest rates may have an impact at some point but given the scale of the shortages of property it is unlikely to rapidly reduce demand in the marketplace.

“There are multiple reasons for this, not least the loss of a substantial period of housebuilding due to the pandemic and subsequent labour and material shortages. We need to have a certain number of new properties built each year simply to keep up with demand and if that stops for even a relatively short period the impact is substantial on demand. 

“Equally there are growing signs of a return of EU nationals and others to work in Scotland, and this increases demand across the property sector which has a knock-on impact upon availability.”

He says demand, and therefore price growth, will moderate later this year but not to any significant degree. 

“I can see demand being sustained into the summer and autumn of this year with perhaps a slowdown toward winter as the various financial impacts of rising base rates, higher national insurance, increasing utility costs, and growing food prices start to impact upon budgets and lifestyles reducing the availability of buyers with as much to spend on housing. But as long as demand remains at this level and supply remains subdued it is hard to see any dramatic fall in prices in the coming months.”