The average price of Scottish country houses will remain static this year with fewer properties on the market by December 2013 than at any time since 2008, an estate agent has predicted at a conference today.

There will however be a rise in transactions as sellers take a more pragmatic view of the market and certain segments will outperform the average by a substantial margin, around 150 delegates heard at Strutt & Parker’s Scottish Property Briefing in Edinburgh’s Physicians’ Hall on Tuesday.

Andrew Smith, partner in charge of country house sales in Strutt & Parker’s Edinburgh office, cited competitors’ 2013 predictions which ranged from a -3.2% drop to a 1% rise and said: “I am more optimistic for 2013 than some of our competitors and believe we will have a static market with little or no movement in prices during the year.

“We will see a slight increase in the volume of properties sold as sellers take a pragmatic view of the market and decide that 2013 is the year they want to move to a new home; average prices will remain static or fall slightly as excess stock that has overhung the market is cleared out; there will be a small reduction in the number of properties coming to the market as people decide to stay put rather than move on in uncertain conditions; and there will be fewer properties on the market in December 2013 than at any time since 2008.”

He added that certain properties would still command a premium, such as houses with water frontage or with paddocks and land suitable for horses as well as extremely pretty houses or those in Scotland’s most sought after locations such as North Berwick.

Mr Smith said that, to understand the market, one has to understand the sellers. The vendors of 62% of the properties sold by Strutt & Parker in Scotland last year were aged 50 and above with 36% being over 60 years old. “These sellers are likely to have built up substantial amounts of equity in their property having benefitted from the rise in property values since the 1960s and are, therefore, on the whole less restricted in their decision-making by finance.

“Two of the major reasons people sell are relocation and downsizing. Many of those relocating are older couples who were moving to be close to family members and in particular that huge attraction of being near grandchildren.”

Mr Smith added: “If people are questioning whether to sell then even more people are questioning whether to buy, as can be seen by the substantial reduction in house sales over the last five years. Buyers are no longer desperate to be on the property ladder and are more than comfortable to remain in rented accommodation until the market stabilises. We are also starting to see people questioning the wisdom of buying property even in the long term.”

He said buyers were affected by the lack of mortgage finance, the economic outlook, less concern about being out of the property market and the cost of moving. Of Strutt & Parker buyers, 60% were aged between 30 and 49. “Most of the momentum is coming from buyers in their 30s and 40s, which suggests they are looking for long-term family homes. It reflects the fact that people are getting married later and starting families later. Illustratively, a recent news story reported that nearly half of all babies are now born to mothers aged 30 and above and infants will soon be more likely to have a mother aged over 35 than under 25.”

Mr Smith said: “Additionally, there is one peculiarly Scottish issue causing people to question whether to buy north of the border; the forthcoming Independence Referendum in autumn 2014. We have already seen the Land and Buildings Transaction Tax (Scotland) Bill published in the Scottish Parliament which, if implemented, will result in a purchase tax on higher value Scottish homes.

“In truth, I think anyone questioning whether to move to Scotland before the devolution proposals are published is not a committed buyer as, with rare exceptions, you do not choose where to live because of Government policy.”

Meanwhile, Kirsten Stuart, associate in the Edinburgh City sales team, said she was confident about the year ahead. She forecast a 2% rise in price for £300,000 to £800,000 properties in Edinburgh City Centre and the prime areas of North Side and South Side.

She said: “I believe the lower end of the market will remain stable due to the continuing lack of mortgage products for buyers with smaller deposits.”

She expected the number of transactions to rise slightly or, at worst, remain the same as last year which totalled 7,731 across the city (all agencies).

Miss Stuart said that 56% of buyers came from within Edinburgh and 9% were from London with 14% from abroad, two of whom were Russian who said they were buying because of the schools. Illustratively, the most popular places to buy were shored up by proximity to some of Edinburgh’s most popular schools in the state and private sectors.

Miss Stuart reported that 49% of buyers were from the financial and professional services sectors. “There is no surprise that the highest percentage of buyers is from the financial sectors given that the RBS, HBOS, Tesco and Green Banks headquarters are in Edinburgh. Professional services such as lawyers and accountants and the medical industry remain strong, also, with fewer buyers from the property industries.”

Miss Stuart continued: “Already in the first 7 weeks of the new year we have seen signs of increased activity including an increase in enquiries, web hits, viewing numbers and the conversion rate of properties going from ‘for sale’ to ‘under offer’. Illustratively, I launched a property in Comiston Terrace onto the market last Monday. So far it’s had 12 viewings and yesterday we received its sixth note of interest.

“So I can therefore say with confidence that if I bring a property to the market in the mid-price range in a central location it will sell for a good price within a reasonable timeframe. However, for the market to get anywhere close to the ‘good old days’ the banks have to increase their lending power and give the consumer more confidence in buying and selling.”