2022 saw the Scottish housing market break the record for £1m+ sales in a year, with 504 transactions passing the landmark price, with Rettie 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%.
2022 saw another surge in the number of prime residential transactions throughout Scotland. We are now seeing a pattern emerge where £1m+ houses are spreading more widely from the previous core areas of Edinburgh and Glasgow with St Andrews and East Lothian showing strong gains as they remain very desirable places to live with a limited number of prime houses coming to market
There are 63 postcode areas in Scotland that have recorded £1m+ sales in the past three years but had no £1m+ sales in the preceding three years.
House price inflation has pulled over 130 transactions into the £1m+ bracket in the past year.
The St. Andrews area delivered 17 £1m+ sales in 2022, with the market now expanded into surrounding areas.
Despite recent demand for rural living, the majority of the £1m+ market remains in urban areas, led by the EH10 postcode.
Over 2/3rds (68%) of the £1m+ sales in 2022 were in Edinburgh & Lothians, spurred in part by new development in the city.
While 2022 has recorded a record volume of £1m+ sales, this has partly been the result of inflation naturally moving values up into a higher category.
Factoring house price inflation from 2021 to 2022 of 6.6%, there are around 130 properties that sold in 2022 that would have likely been under £1m the year before.
This upward price movement has also meant that not only the number, but also the geography of the Scottish £1m+ market is expanding. There are 63 postcode areas in Scotland that have recorded £1m+ sales in the past three years but had no £1m+ sales in the preceding three years.
Some of the £1m+ locations show the emergence of new demand. Fife, particularly in the area around St. Andrews and the East Neuk is a prime example. From 2017 to 2019, there were no £1m+ sales in this region, but in the past 3 years there have been 17. In 2022, St Andrews (KY16) recorded 17 £1m+ sales including a £3.6m sale that exceeded £2,000/sqft.
A rise in sales in rural towns and regions accounted for almost 25% of £1m+ sales over 2020 and 2021. In 2022, while rural living still accounted for around 22% of £1m+ sales, the majority of the market remained in urban areas. One of the trends that has emerged initially in 2021, but has cemented itself in 2022, has been the rise of £1m+ sales in Edinburgh’s suburbs.
Historically, Edinburgh’s New Town (EH3) has consistently topped the charts as the home of £1m+ sales in Scotland, However, in 2021, EH3 lost its crown to West Edinburgh (EH12) and last year, 2022, the Southside (EH10) came top of the £1m sales ranking, with EH3 tied second. This change can be attributed to a couple of market trends. First, there has been an increasing pressure and demand for family housing, especially within desirable neighbourhoods with high quality housing and good school catchments, such as Edinburgh’s Southside. Another reason is new build development. In 2021, the CALA Homes development at Donaldsons brought a unique and high-quality urban lifestyle to the city and in 2022, the Craighouse development has delivered high specification townhouse living in the leafy suburb of Craiglockhart. Elsewhere in the city, areas such as Newington have seen prices rise and push over £1m. In 2020, there was only one £1m+ sale in the EH16 postcode, but in 2022 there were seven.
No, all parts of the housing market have been affected by the recent economic downturn and factors like rising interest rates. However, the prime market seems to have been better protected given strong levels of demand and less dependency on mortgage finance.
It is from a relatively low base but does show that £1m sales have been spilling out of traditional solid areas in the West, like Glasgow Westend, and into neighbouring and hinterland areas. The ‘race for space’ over 2021-22 saw some areas experience a significant increase in demand and this fuelled house prices, particularly for larger properties with ample outdoor space.
Yes, the market dynamics in Edinburgh still suggest ample demand for high-end properties given the wealth of the city and the equity that people have in existing homes. Markets like downsizers remain relatively untapped in the city and there remains a shortage of family housing in sought-after areas like Morningside and Murrayfield, which will keep prices high in these areas and attractive for new build developers when land opportunities emerge.
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