Market Quarterly – The Start of a New Housing Market Chapter

Housing Market Chapter

Today, we have released the latest of our Quarterly Reports on the Scottish housing market.

Key findings include:

  • 2013 has at last seen the Scottish housing market turning the corner, with significant increases in transactions and the value of property sold. Transactions in Scotland are up 13% on the year to date. Average prices have remained relatively stable.
  • This recovery is now being seen in rural areas as well as urban areas. For example, transactions are up by nearly one-third in the Scottish Borders over the last year.
  • However, the market is still some way off its previous peak, especially when values are adjusted for inflation. In Edinburgh, the market is only half of its peak 2007 value in real terms. In Glasgow, it is only one-third of peak.
  • Government stimulus packages are now improving access to mortgage finance, which is helping to increase demand for property, especially from first time buyers. In England, over 90% of homes bought under the equity loan part of Help to Buy were first time buyers and a similar profile is expected in Scotland after a similar scheme was launched here recently.
  • We expect transactions and prices to pick-up over the next five years due to economic recovery, improved lending and improved consumer sentiment. We anticipate average prices rising by over 20% and transactions by close to 50%.
  • The new homes market had fallen to historically low levels by the start of 2013, but this is also now turning due to Help to Buy and the economic upturn. Quality product in well priced and located sites is thriving.
  • The market for social housing has fallen back due to government austerity measures, although new measures are emerging to support new development.
  • Residential land is now established again in prime locations, but land values on many other sites are still significantly discounted.
  • Interest from institutions in the Private Rented Sector is a notable potential game changer in terms of providing new stock. All of the main Scottish cities are being closely considered for residential investment potential, but there have been few actual deals as yet.
  • The rate of growth in the lettings market is showing signs of slowing as the sales market recovers. The exception is Aberdeen, where rents are up nearly 12% on the year. In rural areas, the rental market remains flat.
  • There have been a limited number of quality farms and estates on the market this year. The east is continuing to outperform the west in farmland.

 

Click here to view the full report

 

PR@rettie.co.uk

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