This Spotlight looks at how Scotland's prime residential property market is currently performing and our forecasts for the future. Download here.

Savills Prime Index reveals that while values in key prime areas such as Edinburgh’s New Town and Glasgow’s West End gently improved this year, Scotland’s prime provincial locations lagged behind. This is due to the rebalancing of supply and demand which is taking place in the core areas but is yet to happen in some of the prime regional areas of Scotland.

There is evidence of increasing polarisation within Scotland’s slowly recovering prime market and ‘location, location, location’ has never been a more valid mantra. While a prime property newly launched in Central Edinburgh might attract multiple viewings and competitive bidding, its equivalent in the outlying suburbs is likely to generate considerably less activity. The same can be said of prime properties in the sought after area of St Andrews compared to those in outlying areas within the East Neuk of Fife.

There is some evidence of market strength spilling out to regional locations. Prime transactions in Tayside have increased this year, fuelled by the strong market in Aberdeenshire. Similarly, after a challenging market in 2012, activity in Stirlingshire has bounced back, led by improving markets in Edinburgh and Glasgow. There is still room for further improvement in a number of traditionally sought-after provincial locations like Argyll, Ayrshire, Fife and the Borders (see Table 2).

Whilst the level of prime transactions increased by 6% in the first half of this year across Scotland, compared with the first half of 2012, there was an overall price adjustment of -2%, as sellers accepted more realistic prices. There continues to be a record level of prime homes available to buy in Scotland, according to Savills StockWatch. While there was an increase in the number of homes coming to the market, there was an equivalent increase in the number of sales so the level has stabilised over the past three months (see Graph 1). We expect this trend in transaction levels to continue for the rest of the year and for values to improve when demand and supply rebalance.

Taken from
Spotlight: Scotland's Prime Residential Property Marktet