The Residential Development market across Scotland was at its zenith during 2007 with sales heavily dependent on speculative buy-to-let investors.

However, this market quickly dissipated as lending became tighter due to uncertainty in the financial markets. The Northern Rock Bank crisis was the first indication of difficult times ahead and the term ‘credit crunch’ was born. Developers had to wake up to the new reality and seek alternate sources of demand. Seven years on and family housing has remained the main focus with more diversity in the mix of properties.

Flatted developments in the core areas of Edinburgh and Glasgow are now geared towards young professionals and first time buyers. Location and appropriate pricing remains key with sales dependent on incentives.

Interview with Faisal Choudhry

Key facts:

Job title: Associate Director

Specialisation: Scottish Residential Research

Years at Savills: 10

About Faisal: I joined Savills in 2004 to establish Residential Research in Scotland, following a short career in the general market research sector after graduating in 1999.

Q Why were the years leading up to 2007 considered ‘halcyon’ days for the new build market?

A The market was awash with funding with valuations going through the roof. Housebuilder-funded group holidays for staff were the norm. Agents and surveyors made the most of these good times.

Q Where did it all go wrong?

A The rug was pulled from beneath the feet due to funding constraints. The years that followed saw many developers go into administration leaving behind a large amount of stock, a lot of which was located in non-established regeneration areas.

Q What has changed?

A Developers have adapted to the new environment with appropriate product and pricing. Development has been focused in core central locations with sales heavily dependent on incentives.

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Taken from
25 Years of Savills Residential Research (1989 - 2014)