Best Scottish housing market since the financial crisis, according to Savills research
The number of million-plus residential transactions in Scotland is at its highest since 2008, according to Savills’ latest research report.
The report was launched to 350 representatives of Scotland’s property sector in Glasgow yesterday.
The research reveals that there were 231 million pound-plus transactions during the 12 months ending June 2019, including 19 above £2m in Scotland. These are the highest annual numbers since the 12 months ending June 2008. Whereas 2018 saw no transactions above £3m, there were two in the first six months of 2019.
These figures also look set to rise as a number of high-value deals are yet to be recorded by Registers of Scotland. Strong demand at the top end of the market is further evidenced by a 9% rise in the number of buyers during 2019 that have registered with Savills in Scotland to buy a property at £1m and above.
Faisal Choudhry, Savills head of residential research in Scotland, said: “The market above £1 million was the busiest since 2008, but Scotland’s residential market overall has remained resilient in the face of political uncertainty. A 3% rise in transactions across all price bands pushed the annual number to just under 103,000 during the 12 months ending June 2019, which was the highest since 2008. Year-on-year growth in prime Scottish values during Q2 2019 was up 2.0%, compared with a drop of 0.4% across the rest of the UK.”
The report indicated that Edinburgh’s dominance in the market is increasing as the city accounts for two-thirds of Scotland’s million-pound market and almost 80% of transactions over £2m.
The internal suburbs of Grange, Morningside and Merchiston are the hubs of Edinburgh’s million-pound market. They have accounted for 48 transactions in the last year, eight more than the year prior.
Murrayfield and the area around Belgrave Crescent and Buckingham Terrace have also seen million-pound transactions increase, from 14 to 27. Supported by new-build activity at the landmark Donaldson’s development in Edinburgh’s West End, this means these areas saw more million-pound transactions than the New Town and West End, where sales have recovered since the introduction of Land and Buildings Transaction Tax.
Despite having limited opportunities at the top end, million-pound activity in Edinburgh’s New Town and West End reached the level last seen during the peak of the market in 2008.
Despite strong demand, by contrast, million pound transactions in Greater Glasgow decreased slightly from 29 to 26 over the past year. Falls in the number of sales in the city, Bearsden and Milngavie reflect a lack of properties being put to the market to meet a latent demand. This is further compounded by a lack of downsizing options for some sellers at the top end.
In the Aberdeen area, there were 11 transactions at £1m and above, the highest number for three years following the downturn of the energy sector. The increase took place predominantly in Aberdeen’s West End and the affluent suburbs of Cults, Bieldside and Milltimber.
In other areas of Scotland, the Lothians saw 12 million pound transactions and there were also 10 in Fife, in St Andrews and the East Neuk Perthshire and Stirlingshire also saw slight improvements in their respective markets. Argyll and North Ayrshire both saw their first million pound transactions in two years.
The Borders and Highland experienced only one million pound transaction each over the last year, compared to six and four in the previous year respectively. This reflects the unsteady nature of the million pound market in rural locations which is mainly driven by overseas buyers, where demand is discretionary.
Cameron Ewer, head of residential at Savills Scotland, said: “Looking ahead, a rise in registered buyers this year gives reasons for some optimism. But heightened uncertainty over the outcome of Brexit suggests the UK market will remain price sensitive. In Scotland, the key fundamentals of quality of life, good schools and economic growth in the hubs of Edinburgh and Glasgow will drive local markets. But political uncertainty is beginning to be felt in some quarters. Selling times across Scotland’s cities are slightly higher than last year and mainstream house price growth has slowed over the course of 2019. We, therefore, expect a more considered market for the remainder of 2019. Pricing remains key and sellers will have to be pragmatic in order to align their price expectations with buyers.”