Scotland's greenfield land values have shown remarkable resilience, with a year-on-year growth of 4.5%, compared to a slight decline across the UK. Unfortunately, this trend, which has largely been driven by a severe shortage of supply exacerbated by Scotland’s new National Planning Framework 4 has yet to reach the North East.   Here a number of constraints render many high-density city centre sites unviable.

Aberdeen City and Aberdeenshire Councils are preparing their Local Development Plans for adoption in 2028/29, the first the new planning policy. The framework mandates minimum housing land requirements for 7,000 units in Aberdeen City and 7,550 units in Aberdeenshire, below the past ten-year average. Additionally, developing brownfield land presents challenges: limited opportunities, often subprime, and higher risks and costs.

The good news is that 2025 has the potential to bring more sites forward. Growth in local and national economies should bolster confidence. Aberdeen Housing Market statistics reveal that the average price for a new build property in 2024 was the second-highest since the Oil Price crash, despite a slight decline to £308,600 from £315,800 in 2023. Savills Research forecasts a five-year growth of 6% for house prices in the region.

A key issue remains viability for housebuilders. In 2014, the average price for a flat in Aberdeen was £154,000, with build costs at £59,700. Now, the average price is £122,000, with build costs at £109,000, leaving only £13,000 per unit for land purchase, profit and contributions. BCIS predicts a 2.6% rise in build costs this year.

If councils are serious about delivering housing and infrastructure, they need to allocate development land in higher-value locations, where sales revenues of around £250 per square foot can be achieved. For greenfield sites, this means build costs of around £150 per square foot, leaving £100 per square foot for land purchase, profit, and contributions. Locations like Banchory, Stonehaven, and Inverurie can support these revenues. In contrast, less accessible areas will not deliver the desired results.”

Aberdeen shows promise, with renewed interest from national housebuilders. Persimmon's re-entry into the residential market, with plans for 1,000 units, has helped invigorate the sector. They plan to start construction on three sites this year, with more developments in 2026. This resurgence, coupled with commitments from Cala and Barratts, underscores the city's growth trajectory.

Aberdeen's economy is diversifying and growing across several key sectors. The city remains a global energy hub, leading the transition to sustainable power. It is also becoming a hub for digital and technology expertise, with strengths in ClimateTech, AgriTech, and FinTech. The food, drink, and agriculture sector employs around 22,000 people, remaining vital to the region's economy. Additionally, Aberdeen is home to one of the largest concentrations of life scientists in the UK, fostering significant innovation. There's a renewed focus on tourism and growth in manufacturing and engineering.

These developments make Aberdeen an attractive place for investment and development, ensuring a bright future for the city. Looking ahead, there's optimism that 2025 will be remembered as a year of significant recovery and growth for Aberdeen's housing market, driven by strategic planning and renewed commitment to the region. They signify that Aberdeen is not only preserving its legacy as a cornerstone of the UK's energy sector but also once again becoming a dynamic and attractive city for living, working, and investing.