Scotland’s residential market has remained resilient in the face of political uncertainty. A 2% rise in transactions pushed the annual number to just under 103,000 during the 12 months ending September 2019, which was the highest since 2008. The market above £1 million was the busiest since 2008. Meanwhile, year-on-year growth in prime Scottish values during Q3 2019 was 1.8%, compared with a drop of 0.2% across the rest of the UK. Prime value growth in the city areas of Edinburgh and Glasgow during Q3 2019 was amongst the highest in the country, with capacity for further growth.

Prime activity above £400,000 reached a record 5,331 transactions during the 12 months ending August 2019, with some of the strongest growth taking place in Edinburgh and the Lothians. Meanwhile, a lack of supply led to a stable prime residential market across Greater Glasgow over the last year. However, growth in wider transactional activity has spread out from the city of Glasgow and surroundings hotspots into more attainable commuter locations.

In Scotland’s country locations, the transactional market in the heartland of Fife, Perthshire and Stirlingshire remained steady, however, the number of sales above £600,000 increased by 11%. Argyll & Bute, on the west coast, was one of Scotland’s top-performing residential markets during the first nine months of 2019, recording an 8% rise in the number of transactions compared to the same period in 2018.

Whereas market activity in Ayrshire, Highland and Islands and the Borders remained stable, the residential market in Dumfries & Galloway continues to recover.

Outlook

Looking ahead, a rise in registered buyers this year gives reasons for some optimism. However, we expect the sense of caution in the market to continue for the rest of the year, as buyers and sellers await the outcome of the upcoming general election and Brexit.

In Scotland, the key fundamentals of quality of life, good schools and economic growth in the hubs of Edinburgh and Glasgow will drive local markets. But political uncertainty is beginning to be felt in some quarters, as evident in recent RICS surveys of opinion, which show lower levels of price growth expectations and continuing constrained levels of supply. We expect a more cautious market in the short term. Pricing remains key and sellers will have to be pragmatic in order to align price expectations with buyers.

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