Mainstream market

House purchase activity across Scotland remains robust, with a 20% increase in transactions, from 73,053 during the year ending March 2013 to 87,475 during the year ending March 2014. This was led by a 15% increase in mortgage lending during 2013.

At a Local Authority level, we are seeing continued strong performance in the core markets of Aberdeen and Edinburgh, the commuter locations of East Lothian, East Renfrewshire and East Dunbartonshire and also secondary markets including Angus, Midlothian and Renfrewshire (see Graph 1). The number of residential transactions across Angus increased annually by 33% and is only 11% below the 10-year annual average.

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Market performance in Perth & Kinross was consistent with Scotland as a whole, with the number of residential transactions increasing annually by 20%. The average price of transactions in Angus and Perth & Kinross showed modest growth, with an annual rise of 3%. The residential markets in Dundee City and Perth City have shown resilience with a 14% annual increase in the number of residential transactions, following a subdued couple of years.

Market activity is slightly lagging Tayside and Scotland as a whole, when compared to the 10-year annual average. However, the average transaction prices during the year ending March 2014 in Dundee City and Perth City were 9% and 6% higher respectively than their 10-year average.

The residential market in Perth City has been fuelled by increased activity between £100,000 and £150,000, coupled with a jump in sales between £300,000 and £400,000. Transactions in the higher price band increased to 21 during the year ending March 2014, compared to 10 during the previous 12-month period.

Overall values in Scotland have shown strong growth during 2014. According to data from the Nationwide Building Society, the average Scottish house price increased annually by 8% during the first three months of 2014.

We are forecasting Scottish mainstream values to rise by 5.5% at the end of this year, with five year growth up to 2018 matching that of the UK as a whole. This is on the basis of a ‘No’ vote majority in this September’s Independence Referendum which will bring more certainty to the market.

We expect transactions in Scotland to increase annually by 10% at the end of this year, supported by government incentives, including Help to Buy.

Taken from
Spotlight: Tayside Residential Market