Across Scotland, prime property prices increased by 2.3% between the second and third quarter of 2020. This was driven by behavioural changes that have encouraged many buyers to trade up the housing ladder and others to reassess their work-life balance.

Consequently, the number of buyers registering with Savills in Scotland and viewing properties between July and October 2020 was 142% and 121% higher respectively than the same period last year. Meanwhile, the number of sales agreed between July and October 2020 was 52% higher than the same period last year, according to data provider TwentyCi. The rise in agreed sales is now being reflected in official figures, with September 2020 the busiest ever September for recorded prime transactions above £400,000.

A renewed appetite for space, mainly as a result of the lockdown, has triggered a revival in Scotland’s country house market, particularly from town and city dwellers. Consequently, the combined number of agreed sales during July and October 2020 in country areas was 54% higher than the same period last year.

Despite the rising demand for country living, the markets in Scotland’s cities remain strong due to their access to green spaces, resilient local economies and value for money compared to their counterparts south of the border. Prime value growth in Edinburgh City and Glasgow City was 1.2% and 4.1% respectively between the second and third quarter of 2020. There is the capacity for further growth in the city regions, supported by long term economic and population growth.

At the top end, there were 114 agreed sales above £1 million between July and October compared to 77 in the same period last year, according to TwentyCi. Normally, Edinburgh dominates this market. However, 61% of agreed sales took place in country locations, most notably in Aberdeenshire, Perthshire, the Borders and East Lothian.

Outlook

While we are seeing a larger pool of buyers than at any time last year, they are in the enviable position of being able to choose from a wider selection of properties.

We anticipate that this healthy alignment of supply and demand will prevent the market from overheating. Although there may be uplifts in particularly desirable hotspots across the country, we see this trend persisting for some time.

Looking to the future, we can take encouragement from the fact that, although there appears to be pent-up demand from international buyers awaiting an easing in travel restrictions, the surge in sales has relied on domestic buyers. Furthermore, a prolonged period of ultra-low interest rates should support pricing over the medium term.

_{Read the articles within Spotlight: Scotland Residential below.}