Prime sales up

Prime residential (£400,000 and above) led the Scottish housing market with a 30% annual increase in activity during 2014. There were 3,299 prime Scottish sales recorded in 2014, the highest number since 2007 (see Graph 1).

The prime market was boosted by the hubs of Edinburgh, the Aberdeen area and Greater Glasgow, where activity collectively increased by 33%. Together they account for almost 75% of Scotland’s prime transactions.

CLICK ON IMAGE BELOW TO ENLARGE

Edinburgh

Edinburgh was heavily supported by strong growth in the hotspots of the New Town and the West End, where prime transactions collectively increased annually by 46%, representing 194 sales. While prime activity across Edinburgh’s suburbs has remained subdued in recent years, there was a discernible rise in sales in the Colinton area, with 31 prime sales recorded last year, compared to 24 in 2013.

Aberdeen

Prime activity in the West End, Bieldside, Cults, Milltimber and Peterculter made up nearly 65% of transactions across the Aberdeen city area last year, representing 217 sales. Demand has far outstripped supply in such hotspots, restricting the increase in prime sales across the city.

The Aberdeen economy and its housing markets are inextricably linked to the vagaries of the UK oil and gas sector. Falling oil prices may lead to a slower rate of growth in prime residential values and an increase in the level of stock being launched to the market.

This is likely to reduce the growth in prices seen across Aberdeen City, which have increased year-on-year by an average of 7% since the beginning of 2013, compared to 3% across Scotland as a whole. With prices at 30% more than the Scottish average, Aberdeen will be able to absorb a cooling off in values in the medium term.

Glasgow

The prime market in the Glasgow city area was boosted by increased activity in the Pollokshields area, where prime sales more than doubled, from 21 in 2013 to 45 in 2014. Around 58% of prime sales in Glasgow last year took place across the West End of the city, as is demonstrated in the case study on this location.

Regional

Market strength has rippled out into desirable and commutable provincial towns. Some of Scotland’s top performing locations last year included Banchory, Inverurie, St Andrews, Melrose and Bothwell. Interestingly, the number of prime sales in the Highlands & Islands doubled last year, with increased demand from local buyers in more populated locations, such as Inverness and Nairn.

Taken from
Spotlight: Scotland's Prime Residential Property Market - Spring 2015