Secondary Scottish locations have come to the forefront of the property market in the year to June 2015. Annual transactional growth in areas such as Glasgow City, West Dunbartonshire and Argyll & Bute was higher than in Scotland as a whole, with buyers now looking beyond primary locations in search of more affordable and attainable property.

Secondary locations have benefitted from the UK Government’s Help to Buy (HTB) mortgage guarantee scheme and the Scottish Government’s new build scheme, with its £250,000 price limit applicable to greater numbers of properties than in more expensive core areas. Both Glasgow City and West Dunbartonshire have enjoyed a significant increase in supply, with private sector housebuilding completions up by 44 per cent and 75 per cent respectively, driving up transaction levels. In contrast, traditional primary locations such as East Renfrewshire, and Aberdeen City have suffered from a lack of supply and are subsequently lagging in terms of activity, although prices have remained stable.

In Argyll & Bute the attractive town of Helensburgh has also experienced a resurgence of interest following the referendum, with interest in holiday destinations regaining momentum.

Across the board, transactions above £500,000 have fallen slightly in Scotland due to short-term uncertainty following the introduction of Land and Building Transaction Tax (LBTT), but we’re confident sales will pick up as the market adjusts to the new system. Below this threshold, the property market is strong and there is still a great deal of activity up to £500,000. The HTB mortgage guarantee scheme has assisted more first-time buyers in Scotland and across the UK to get on the housing ladder, with 78 per cent of users purchasing their first home.

Looking ahead, the scaling back of government initiatives and continued lending constraints could prevent significant growth in Scottish transaction levels. The discontinuation of the HTB new build scheme combined with the stricter lending criteria introduced by the Mortgage Market Review (MMR) will limit the number of buyers who can access sufficient lending to purchase property. Anticipated rises in mortgage rates could also dampen activity among those with lower deposits. Consequently, transaction levels are not likely to show double digit growth in the year to June 2016, but we would expect to see a small rise.

Further information

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