Scotland’s property market update
While the rest of the UK stutters, property values North of the border are pulling ahead. A new report by estate agent Savills found Scottish house prices had risen for 27 consecutive months and the future also looks bright. The agent forecasts a price rise of 17% by 2022 – compared to a predicted rise of 7.1% in London and 14.2% across the UK as a whole.
Property values in Scotland’s two major cities are also overshadowing UK counterparts, with annual growth in Edinburgh (7.5%) and Glasgow (2.5%) firmly in the positive, with negative house price growth in cities down South, including Bath, Cambridge, Bristol and Winchester.
Savills also found the average transaction price in Scotland had risen to £176,548 in 2018 (June year end) compared to a value of £168,476 in 2017, with million-pound transactions in the same period up from 143 to 201, annually.
Sales are proving to be just as perky as house price growth, with a separate survey by the Royal Institute for Chartered Surveyors painting a ‘sturdy’ picture of the Scottish housing market. A net balance of 7% of its chartered surveyors said they had seen an increase in sales during August 2018. There are supply issues, however, with some regions experiencing a fall in available sales stock. This is most noticeable in the Highlands and Islands, Ayrshire, Stirlinghshire, the Glasgow suburbs, Heartland, Borders, and Dumfries and Galloway.
Scotland’s rental market is in a period of adjustment, with news rules introduced in 2018 designed to improve standards in the rental sector. A new Letting Agent Code of Practice came in to effect in January and all agents were required to sign up by September of this year. It is now a criminal offence to conduct letting agency work if the agency is not on Scotland’s register. The good news is the change hasn’t dampened the lettings market.
In fact, LSL Property Service’s latest buy-to-let index (October 2018) showed Scotland’s rental market returned to growth, with marginal 0.1% uplift across the country in September 2018. The average seasonally-adjusted rent in Scotland stands at £572 pcm, with the Highlands and Islands the most expensive places - 13.7% growth in the last year - beating Edinburgh and the Lothians. For landlords, Scotland remains an attractive bet, with average yields of 4.7%.