Scottish Residential Property Market Outlook March 2015
In our role as Wealth Managers we work alongside a number of other key professionals to make sure our clients get the best advice from across the spectrum.
This will range from legal, to accountancy, to property and beyond.
For our first guest blog I am delighted to introduce a commentary from Faisal Choudhry of Savills on the West Central Scotland property market.
As we enter the spring season, we expect the remainder of 2015 to be a period of growth across the entire Scottish residential property market due to three important solid foundations being established: favourable LBTT rates for the majority of buyers, a dissipation of interest rate fears in the short term, and the continuation of gradual economic growth.
The core locations of Aberdeen, Edinburgh, East Renfrewshire and East Dunbartonshire continue to lead the Scottish market due to factors such as strong employment opportunities and good schools. However, market strength has spilled out from the hubs into secondary and commuter locations, helped by attainable house prices and new build developments.
We are forecasting annual growth of 3.5% in Scottish mainstream values by the end of 2015. However, tighter mortgage lending criteria and anticipated rises in mortgage rates towards the end of this decade could limit capacity for strong transactional growth and price growth.
Prime Scottish values in city locations increased annually by 4% during the first quarter of 2015, whereas rural areas fell by 1.6% over the same period. This has reflected the wider UK trend, whereby buyers of urban properties continue to be driven by catalysts, such as job relocation or schooling, keeping the market active. Rural buying decisions have been more discretionary.
The prime market across Greater Glasgow was boosted by increased activity in city and suburban locations such as the Pollokshields area, where the number of prime sales more than doubled last year. Sales at £1million and above in the Greater Glasgow area reached 18 in 2014. Eight such sales took place in the prime suburbs of Bearsden and Milngavie, which was the highest level in this area since 2008.
Further progress at the top end of the market is likely to be hampered by the introduction of Land and Buildings Transaction Tax (LBTT) and uncertainty in the lead up to the UK General Election. The prospect of increased property tax at the upper end of the market will mean a more subdued outlook, with Scottish prime values likely to show minimal growth this year.
As a consequence, there are opportunities for buyers to take advantage of relative affordability, particularly in country locations. From 2016 onwards, we expect the prime market to absorb the turbulence of recent political and taxation challenges and to continue the value growth that had been underway prior to the Referendum.
For more information please contact
Faisal Choudhry
Savills Residential Research – Scotland
0141 222 5880
fchoudhry@savills.com
Important notice
This report is for general informative purposes only. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use.
I hope you find this a useful change of pace and as usual I welcome any feedback here on this and other areas you would be interested in hearing about.