Savills analysis of the origin of buyers who bought £1 million and above properties last year reveals that 18% came from outside Scotland. This compares to 25% the previous year, and only 10% during 2009. Of the £1 million and above Scottish property buyers last year, 8% came from south of the border, including 4% from London. The remaining 6% were overseas purchasers originating from as far afield as China and the USA.

The traditional ripple effect of equity from London was less prevalent last year, with the Capital being seen as a relatively safe store for private wealth within an unsettled global context. As a result, the gap between London’s prime residential property values and those in regional hotspots was at a record high, with Prime Central London values rising by 14%, against a 4.7% fall across Scotland as a whole.

However, as a result Scotland is perceived as offering value for money, particularly as a second home location. Scotland’s relatively stable economy, its global reputation for education and the UK’s beneficial exchange rates are also cited by international buyers as reasons to buy property in Scotland.

Equity rules

The level of equity tied up in housing has rocketed in recent years, and housing has cemented its position as an unparalleled store of private wealth. Across the UK, an astounding 71% of housing is held as equity. Despite recent volatility, the past decade has seen the value of the UK’s housing stock rise to more than £4.3 trillion in 2011 from just under £2 trillion in 2000. Outstanding mortgage debt stands at around £1.24 trillion, while equity (net wealth, invested in residential property) is around £3.1 trillion.

Across Scotland the value of housing increased from £127 billion to £302 billion over the same period as values grew strongly in the latter part of the last housing cycle.

Taken from
Spotlight: Scotland's Prime Residential Property Market, March 2012