Andrew Perratt
Andrew Perratt

Scotland’s residential market strongest since 2008

Scotland is seeing its best residential market since 2008, according to research released by real estate company Savills.

The number of residential sales in Scotland last year was 9% above the ten year annual average. In addition, Scottish property attracted more top-end buyers from outside Scotland, fuelled by favourable exchange rates.

Andrew Perratt, Head of Savills Residential Sales in Scotland said: “In times of political and economic uncertainty, high net worth investors are drawn to prime central hotspots which are considered safe investments and good value for money. That is exactly what we are seeing here: interestingly not only is there more investment from outside Scotland in residential property, but also in commercial and rural markets. Scotland is being seen as a sensible place to do business and invest in land and property across the sector. Scotland is not depicted by boom and bust but by a healthy functioning market.”

An imbalance between growing demand and lack of supply in central hotspots is fuelling price growth, which is now filtering through to Scotland’s heartland of Tayside, Stirlingshire and Fife. Both prices and transactions have recovered in more rural locations where the market is now stable.

A reduction in selling times across Scotland’s cities, and exceptional off-plan sales within the new build markets of Edinburgh and Glasgow, are resulting in supply constraints.

Transactions and prices across Scotland increased by 3% and 3.5% respectively in 2016 despite the Brexit vote effect, a drop in mortgage lending and a slowdown in the Aberdeen area.

Faisal Choudhry, Savills Head of Research said: “Buyer sentiment across the UK market will remain sensitive over the next few years as the process to leave the EU unfolds. However so far, the market north of the border as been more protected from political vagaries: we anticipate a slow down in value growth and for realistic pricing to drive a continued recovery in transactions.”

Key highlights of the Scottish market include:

- There were 100,081 sales in Scotland last year, the highest number since 2008
- The time taken for properties to sell has fallen from 16 weeks in 2014 to 12 weeks in February 2016
- Values across hotspots in Edinburgh and Glasgow increased by 4.2% last year
- There were 263 new build transactions above £400,000 in Edinburgh, the highest annual number in five years
- The commuter location of Renfrewshire saw 19% growth in overall sales last year, the highest in Scotland
- Last year saw the highest ever number of buyers originating from outside Scotland in 10 years, accounting for 44 of the 165 sales above £1m. This included 21 from outside the UK, 23 from London and other English locations