Prime residential property in Scotland continues to operate well above pre-pandemic levels
A remarkable period of housing market activity has led to the highest number of Scottish transactions in 13 years (September 2020 to August 2021) and a record number of prime sales above £400,000 in both urban and country locations. This is despite Scotland not benefiting from the same level of tax holiday on offer south of the border.
As winter approaches, the market, though less frenzied compared to earlier this year, remains well above normal conditions. According to data provider TwentyCi, the number of agreed sales in Scotland above £500,000 during October was 38% higher than the average for the same month between 2017 and 2019.
Demand outweighs supply
With improved seller confidence, the number of £500k+ new properties coming on to the market in October was 23% higher than the pre-pandemic average. This follows a formidable vaccination programme and relaxation of lockdown rules. Yet, there is a shrinking pool of stock, with 22% fewer properties listed at any one time.
Whilst supply has improved, there is unprecedented demand, with the number of new buyers registering with Savills to buy a Scottish property 61% higher in October than two years ago.
Consequently, well-priced properties are selling almost as quickly as they become available in the most sought-after areas. As a result of competitive bidding and strong premiums, prime Scottish values are 8.1% higher than a year ago, which is the highest annual growth figure in 11 years.
Strong commitment to moving
Looking ahead, with a continuation of hybrid working patterns and changing buyer requirements, there is still a relatively strong core of unsatisfied demand, with a net balance of +16% of respondents to our September survey of buyers and sellers indicating more commitment to moving at some point in the next 24 months. The ongoing supply/demand imbalance underpins our forecast of 4.0% annual growth in prime and mainstream Scottish values next year.
But the increased cost of living and gradually rising interest rates are expected to temper medium-term prospects of price growth, as buyers’ spending power is gradually reduced. An alignment of buyer and seller expectations will therefore be vital in order to maintain market momentum.
Read the articles within Report: Prime Scotland Residential – Winter 2021 below.
