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Prime sector leads ‘remarkable period of activity’ in Scottish housing market

The latest analysis from Savills reveals a remarkable period of activity within the Scottish prime housing market and includes the following standout statistics.

Prime transactions above £400,000 in Scotland reached an all-time record (8,755 took place between Sep 2020 and Aug 2021). This is 75% more than the pre-pandemic three-year average.

Overall Scottish transactions (Sep 2020-Aug 2021) reached 122,412, the highest level in 13 years.

There were a record 435 transactions above £1 million during the 12 months ending August 2021, including the highest price ever paid for a residential property in Scotland.

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According to Savills data, the number of £500k+ new properties coming on to the market in October was 23% higher than the pre-pandemic average. This follows a rise in buyer confidence, following a formidable vaccination programme and relaxation of lockdown rules. Yet, there is a shrinking pool of stock, with 22% fewer properties advertised.

Whilst supply has improved, there is unprecedented demand. The number of new buyers registering with Savills to buy a Scottish property was 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 markets. The result has been competitive bidding, strong premiums and, ultimately, price growth. Scottish values are 8.1% higher than a year ago, which is the highest annual growth figure in 11 years.

Faisal Choudhry, head of residential research, Savills Scotland, said: “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.”

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He continued: Scotland’s country locations are attracting a large number of prime buyers from all over the UK and beyond who are seeking a lifestyle change: they are taking advantage of greater flexibility in their working lives and widening their traditional search area”.

Scotland’s Heartland (Stirlingshire, Perthshire and Fife) saw 40 transactions above £1 million over the last year, spread over a number of towns and villages. Whilst St Andrews dominates Fife, there was a rise in Elie and Earlsferry. Perthshire saw top-end sales in Strathtay, Comrie and Gleneagles, whereas Bridge of Allan, Dunblane and Strathblane contributed to Stirlingshire’s share of the Heartland’s million pound market.

In Edinburgh, fierce competition for family homes led to an 8.3% annual rise in prime values. While the popular inner suburbs of Grange, Morningside and Merchiston remain very buoyant, Inverleith, Stockbridge and Trinity were the standout locations, with 92% more prime transactions than the pre-pandemic average.

New build developments have also supported growth in Edinburgh’s surrounding enclaves: prime activity was strongest in Linlithgow in West Lothian and East Lothian’s coastal areas of North Berwick, Gullane, Dunbar and Aberlady. Meanwhile, value for money has increased demand leading to value growth in Haddington and Penicuik.

There were a record 713 prime transactions in the city area of Glasgow. A surge in housing market activity in and around Glasgow was led by the West End, Park and Jordanhill, with a rise in demand for family homes in Pollokshields and Newlands. The market has also grown in emerging prime locations such as North Kelvinside.

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Outside the city, new build sales boosted prime market growth in Newton Mearns, Kirkintilloch and Bishopbriggs. Meanwhile, a strong second-hand market has supported Bearsden, Kilmacolm and Giffnock. Whilst Bothwell and Thorntonhall remain Lanarkshire’s prime mainstays, the market here has recovered in commuter towns and attractive villages along the Clyde Valley.

Turning to the million pound plus market in the city of Glasgow, there were a record 34 million pound plus transactions over the last year, mostly in the West End and Park Areas. Here, Kingsborough Gardens and Park Circus recorded nine transactions between them. In the suburbs, the sought-after Whitecraigs area of Giffnock dominated million pound activity in East Renfrewshire. In the north however, a lack of supply has limited top-end activity in Bearsden and Milngavie.

Aberdeen and surrounding areas are witnessing their best prime transactional markets since the oil and gas led housing market downturn. Growth was led by the second-hand and new build markets in the popular AB15 postcode and areas within easy reach of the city, including Inverurie, Banchory and Stonehaven. Although stock levels continue to reduce, the market remains price sensitive.

Significantly, the Aberdeen area saw 14 top-end transactions in the 12 months ending August 2021, the highest annual number for this time period since 2015.

Meanwhile, Dundee’s record prime transactional market was led not only by the traditional hotspot of Broughty Ferry, but also in the west of the city in neighbourhoods around Ninewells Hospital and peripheral new build developments, spilling out into the villages of Liff, Piperdam and Auchterhouse.

Source: Scottish Construction Now

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Housing market starts to reopen in Scotland as lockdown eases

From Monday 29 June, restrictions on housing moves will be eased in Scotland as part of the easing of its lockdown measures.

This will allow valuations and viewings to take place, and marks the initial stage in the reopening of the Scottish housing market.

This development in Scotland follows a similar move to ease lockdown on 19 June in Wales, which saw the government allow viewings to take place in vacant properties, and to ease restrictions on house moves where a sale has been agreed, but not yet completed.

In England, it has been more than a month since equivalent changes were made on 13 May.

First Minister Nicola Sturgeon, said: “The sacrifices that have been made – and I know how hard and at times painful they have been – have suppressed the virus.

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“They have also protected the NHS, and have undoubtedly saved a significant number of lives.

“They have also brought us to the position where we can now look ahead with a bit more clarity to our path out of lockdown, and I hope details announced today will provide people and businesses with more certainty in their forward planning.

“But let me be clear that each step on this path depends on us continuing to beat the virus back. That is why we must do everything in our power to avoid steps being reversed.

“The central point in all of this is the virus has not – and it will not – go away of its own accord. It will pose a real and significant threat to us for some time to come.

“Maintaining our progress also means all of us abiding by public health guidance.

“Wearing face coverings in enclosed spaces, avoiding crowded places, washing our hands and cleaning surfaces regularly, maintaining physical distancing, agreeing to immediately self-isolate and get a test if we have symptoms – all of these basic protections matter now more than ever as we all get out and about a bit more.”

A statement from the Welsh First Minister, Mark Drakeford MS, said: “This package marks a significant unlocking of the regulations and, for many aspects of daily life in Wales, we are moving into the amber phase of our traffic light system.

“We have been able to do this because of the actions everyone in Wales has taken to date in complying with the stay-at-home and stay local rules.

“We need everyone to continue to take steps to protect themselves and their loved ones as we find a way to live and work alongside coronavirus.

“This means working from home wherever possible, maintaining social distancing and frequent handwashing.

“For some people it may mean wearing a face covering in certain situations, for others it will mean continuing to shield.

“I want to thank everyone for everything they have done so far. Together we can keep Wales safe.”

Mark Hayward, chief executive at NAEA Propertymark and David Cox, chief executive of ARLA Propertymark, said: “It’s great news for consumers and the industry in Scotland that the property market is reopening on Monday.

“Whilst it is not a return to normal, the new guidelines will allow members of the public to view, purchase, rent and move into new properties…reinvigorating the housing market and boosting the economy.

“Of course, safety is paramount, and we encourage all agents to follow the Propertymark guidelines on property viewings and moves closely to protect themselves and others.”

By Jessica Bird

Source: Mortgage Introducer

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Scottish housing market poised for ‘two waves of bounceback’

Scottish housing market is poised for two waves of bounceback with the expectation of a return to pre-coronavirus levels, a leading industry figure has predicted.

The sector has been rocked by stay-at-home and physical distancing measures for agents, surveyors and prospective buyers, combined with a backlog in applications via the Land Register of Scotland service.

However, Paul Denton, the chief executive of the Scottish Building Society, which was established in 1848, said he was starting to see some signs that buyers were looking to life beyond the Covid-19 peak.

“We are still open for business, with our primary focus the health and welfare of our staff and our customers, ensuring we support them financially and emotionally through this time of crisis,” he said.

“We are starting to see signs that buyers are now thinking about life after the Covid-19 peak, with a rise in enquiries on purchase mortgages. And, indeed, our staff are busy processing remortgages, even for those on a mortgage holiday.”

Denton, who represents Scotland on UK Finance’s mortgages board, added: “I think there will be two waves of bounceback. The first, when Registers of Scotland fully reopens and starts clearing the backlog of applications from solicitors. And the second when social isolation measures ease and consumer confidence starts to grow.

“It is clear that the drop in sales volume is driven by social isolation and not a lack of demand from customers.”

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New figures show that the average price of a property in Scotland in February was £150,524 – a year-on-year increase of 2.5 per cent, according to statistics from the UK House Price Index. The UK average house price was £230,332 – up 1.1 per cent.

The largest decrease was recorded in the City of Aberdeen, where the average price fell by 3.6 per cent to £143,990. The highest-priced area was the City of Edinburgh, where the average price of a house is £270,864.

Denton added: “These statistics pre-date Covid-19 but reinforce the trend of Scottish house prices rising faster than the rest of the UK as demand outstrips supply. However, there are marked geographical differences too, with the challenges in the oil and gas sector impacting the Aberdeen market.

“Scotland weathered the storm during the 2008 financial crisis. We know this is on a different scale, but the underlying market is resilient and that latent customer demand will see the market bounce back to something near the levels we saw at the beginning of the year.”

By Scott Reid

Source: Edinburgh News