The behavioural changes that have encouraged many buyers to trade up the housing ladder and others to reassess their work-life balance have also supported Scotland’s new homes market. Whilst a lot of buyers have been missing out on their dream second-hand home due to competitive bidding, the new build sector has attracted these buyers given the fixed prices and incentives on offer.

Consequently, there was an 18% rise in registered new build transactions in Scotland between October 2020 and March 2021 compared to the same months between October 2019 to March 2020.

Healthy rate of sales

Market momentum has continued so far in 2021 and we are encouraged with the 26% and 63% annual rise in buyers registering and reserving new homes respectively with our offices in Edinburgh and Glasgow between January and April this year. Moreover, our examination of new build sites across Scotland shows healthy rates of sales. We are also seeing strong growth in second-hand prices of recently-built sites in areas where there has been a lack of new developments.

20-minute neighbourhood

Since the pandemic, Scotland’s new homes market has been led by demand for family homes in suburban locations, due to the trend for more space, both indoors and outdoors. But as lockdown rules are loosened, there is now an urge to move back into cities and there is demand for areas that fit within the concept of a 20-minute neighbourhood, in which daily necessities, such as work, shopping, entertainment, schools and recreation are all within a 20-minute walk or cycle from a home.

There is also keen interest in city developments that offer private outdoor and storage space, especially from downsizers. But supply remains constrained as new build developments in many city neighbourhoods have now completed, with a lack of fresh sites to meet this demand.

Realistic pricing

Looking ahead, while the market will remain strong above £250,000, it will be challenging below this level for f latted developments in city locations, especially for first time buyers due to tight lending criteria and diminishing government incentives.

Going forward, realistic pricing, targeted marketing campaigns and robust marketing budgets for increased digital collateral will remain key factors in optimising rates of sale. The importance of providing interior designed show homes will continue to remain important to allow selling prices to be maximised and in particular to secure buyers looking to move in the short to medium term in city locations.