Prime transactions fall

The prime market in Scotland (over £400,000) saw transactions fall by 5% last year to 2,070 compared to 2,187 in 2011. Whilst the year 2012 had begun in a similar vein to the year before, events such as the Diamond Jubilee and the London Olympics diverted the nation’s attention from the business of buying and selling houses, further slowing the traditionally quiet summer market. However, the final months of the year saw a modest upswing in activity, with the momentum continuing into the first quarter of 2013, and barely a pause for the Christmas break.

Whilst prime transactions were down overall across Scotland, distinct pockets of the country went against the overall trend to varying degrees. The number of sales increased in Argyll & Bute (+47%), East Lothian (+38%) the Edinburgh suburbs of Inverleith (+29%), New Town (+24%) and Stockbridge (+22%), Dumfries & Galloway (+41%) and Renfrewshire (+2%). All other areas saw a negative change in the number of annual sales.

The locations mentioned above straddle east and west, and have different characteristics (seaside commuter town, rural idyll, prime suburb etc) and all comprise a high proportion of high quality prime, period housing. They are also all established, sought-after, best-in-class locations whether by virtue of their proximity to Scotland’s leading schools, the capital’s commercial centre, or simply because they offer a desirable lifestyle in some of the most beautiful parts of the Scottish countryside.

However, these are not the only common themes. Importantly, the houses that have sold in these prime locations have, for the most part, been realistically priced, offering value for money in a tough economic climate.

As previously stated, these cases are exceptions to the rule and the total number of prime transactions across Scotland has been compromised by steep falls in locations with Lanarkshire (-33%) and Ayrshire (-27%) being the most extreme examples.

Stock level remains high

The figure of 2,070 prime property sales last year is not a problem in itself, and is similar to the number of homes changing hands on average per year (2,210) between 2003 and 2012. The real challenge for the majority of sellers, and the issue at the heart of the current property market slump, is the high number of properties left unsold on the prime housing market, particularly in areas where supply is outstripping demand, and where asking prices are simply too high and out of step with what the market will pay.

The red line within the Savills StockWatch chart shows the number of prime properties available to buy at £400,000 or above in Scotland. While this has dipped in recent weeks, the overall trend has been upward since the slump of 2009 and has reached unprecedented levels with 1,282 homes now on the market. This compares to 500 at the height of the market and is 20% higher than at the same point last year. It is anticipated that while the level of prime properties on the market will continue to climb as spring gets underway, and new sellers attempt to take advantage of better weather to market their homes, the rate will be slower than last year.

Taken from
Spotlight: Scotland's Prime Residential Property Market Spring 2013