As East Lothian locals know, the area is well known for having its own unique microclimate. Rain may be settled over the capital, but a short drive east will often reveal blue skies and a warm breeze. This happy distinction is also true of the East Lothian housing market.
Scotland's housing market's performance has been dominated by ‘events’ over the past 15 years or so, beginning with the collapse of Northern Rock at the end of 2007, which signalled the end of the mortgage credit boom across the UK.
Despite the summer season, the Scottish BTR sector is experiencing a somewhat gloomy 2023, but there is still hope for an Indian summer.
A lot can happen in 9 months … It really is just 9 months since Kwasi Kwarteng introduced his mini-budget in September 2022. The resulting money market panic that seeped into the wider economy, including the housing market, is, of course, a matter of great regret for many.
Did you know? The average house price in the West End* in 2022 was £258,000, 28% higher than the Glasgow average of just over £200,000. *Postcode districts of G3, G11, G12, G13, G14 and G20
Our recent review of Scotland's Land & Buildings Transaction Tax (LBTT) shows that, in 2022/23, LBTT revenue reached a record high in Scotland, driven by a relatively strong sales market and rising prices.
Rettie & Co.'s established research team were commissioned by the British Property Federation to undertake research on the Scottish Government's rent freeze and its impacts, particularly on the Build to Rent (BTR) sector.
2022 saw the Scottish housing market break the record for £1m+ sales in a year, with 504 transactions passing the landmark price, with Rettie & Co. now involved in the sale of over 1 in 5 transactions in excess of £1m. In fact, in just two years, the Scottish £1m+ market has risen by 80%.
The calm waters of the mortgage market over the last decade or so have got far choppier in recent months. The very low interest rate environment from the mid-2000s now appears to be at an end as inflationary pressures, predominantly arising from the energy crisis, have led to a sharp rise in interest rates, with mortgage rates being correspondingly affected.
2022 was an eventful year by any standards. Russia's invasion of Ukraine triggered a number of significant effects, with rising energy costs fuelling inflation and contributing to an ongoing cost-of-living crisis, while significant political upheaval during the year has led to economic turmoil.
Responding to a perception of an overheated rental sector partly contributing to a cost-of-living crisis, the Scottish Government has attempted to apply a 6 month freeze to the market. This rent freeze, for all private sector and social sector residential rents, will run until the end of March 2023, with the possibility of an extension beyond this date. A ban on evictions is also running alongside the rent freeze.
The past couple of years have been a sharp wake-up call for the rental sector, and more widely, the property sector in Scotland. Restrictions and changes to the way we live and work have impacted demand and supply across the market.