Savills: room for maneuver for further growth in the Scottish residential property market


Savills: room for maneuver for further growth in the Scottish residential property market

The leave scheme that protected jobs and income, along with cheaper mortgages and a benevolent approach to short-term arrears by lenders, has meant the residential sector has been the star player in the Scottish economy after it reopened following the initial Covid-19 lockdown, the head of residential research at Savills said.

Faisal Choudhry

Faisal Choudhry presented its latest findings to an audience of 400 real estate professionals at Savills Scottish Property Outlook this week.

He said: “Market activity has been exceptional since the summer of last year, particularly in the main market where agreed sales above £ 500,000 are 67% above the pre-market average. pandemic, according to data provider TwentyCi. “

The annual growth in house prices in Scotland in the third quarter of 2021 was 12%, compared to 10% in the UK.

He added, “We have experienced a market that is driven by practicalities rather than forced sales or economic considerations. A desire for more space indoors and outdoors, with a separate space for working or studying, has fueled the demand. Therefore, number of agreed sales in Scotland increased by 35% between July and December of last year compared to 2019, according to data provider TwentyCi. This momentum has continued this year, with sales agreed so far 13% above the number before the pandemic in 2019. ”

Faisal said the low number of homes sold by sellers is driving up prices: “Potential homeowners have been hesitant to sell in the current market. Many are experiencing delays in appointing tradespeople to present their homes in market ready condition. Others are put off by the lack of choice in the market when it comes to buying their next property. This vicious cycle means more buyers are looking for fewer properties, which leads to competitive bidding and strong bids. “

As has been well reported, the pandemic has resulted in a ‘space race’ and a resurgence in demand for country life. Indeed The annual growth in house prices in more remote places like Argyll and the Borders is now around 20%, according to the official UK House Price Index from July 2021. However, Savills’ latest survey of buyers and sellers reveals that since the lockdown ended, the vaccination program rolled out and towns reopened, the market is becoming more balanced.

From young workers to downsizers, buyers are once again choosing to live close to family and friends as well as places of work and play. Indeed, house prices in town rose by 8% each year in Edinburgh and 14% in Glasgow and Dundee in July of this year, according to the official UK house price index.

The latest Savills survey explored the commitment of buyers and sellers to relocate and found that there was pent-up demand in the medium to long term, with the lack of available stock in the market being the main obstacle to moving. purchase.

Mr. Choudhry concluded: “The imbalance of supply and demand suggests further room for price increases. Nevertheless a gradual rise in interest rates and the prospect of higher taxes could temper longer-term growth levels. This The imbalance between supply and demand underlies our forecast of 9.5% annual growth in Scottish house prices by the end of this year, led by towns and suburbs around Edinburgh and from Glasgow. “

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