Scotland’s prime residential market led the wider recovery in transactions last year as mortgage rates eased. Appropriate pricing was essential for sales to progress due to more available stock, however prices were largely stable. Looking forward, demand for family homes will underpin activity despite ongoing economic and taxation challenges.
Faisal Choudhry, Director, Savills Residential Research
- Scotland’s prime market rebounds following a surge at the end of the year
- Prime Scotland prices remain stable despite more choice for buyers
- Prime sales rise in Scotland’s main cities amid varying price performance
- Perthshire, Angus and Aberdeen areas – challenges and changes
- Positive outlook for Scotland's prime market despite economic challenges
A strong fourth quarter capped a significant recovery in terms of transactions across Scotland’s residential market in 2024. After a dip in 2023, the number of net agreed sales across all price bands increased by 12% last year, supported by stable mortgage rates.
The number of sales in the market up to £500,000 which is more reliant on lending increased by 12% between 2023 and 2024. However, Scotland’s equity-driven prime market above £500,000 outperformed with a 23% uplift. This was higher than the rest of the UK’s figure of 20%.
The impact of political and fiscal changes last year was felt more in the relatively smaller part of the prime Scotland market above £750,000, where the number of agreed sales increased annually by 8% during Q4 2024.
On the other hand, year-on-year growth in the more needs-based prime Scottish market between £500,000 to £750,000 reached 30% during Q4 2024. Here, market activity was underpinned by stability in the cost of lending and the prospect of further base rate cuts in 2025.
The number of prime Scotland properties selling above £500,000 reached a record number during 2024 as a consequence of robust price growth witnessed since the Covid-19 pandemic.
Whilst prime Scotland sales increased in 2024, the number of £500k+ available properties was 24% higher at the end of 2024 compared to the end of the previous year. This is because properties are taking longer to sell compared to the pandemic years as buyers are exercising more caution due to stretched affordability.
The sensitive nature of the current market led to a 39% rise last year in the number of £500k+ properties that had a change in their asking price. However, this didn’t have a significant impact on prices.
According to the Savills prime index, prime Scotland prices showed resilience despite increased availability, with a rather negligible drop of -0.1% in the three months to December 2024. This puts prime Scotland prices level with the end of December 2023 but 15.5% higher than in March 2020 before the beginning of the pandemic.
Prime regional prices outside London also fell slightly at the end of last year, leaving them -1.0% lower than Q4 2023 but 9.5% higher compared to March 2020 before the beginning of the pandemic.
Edinburgh City was the hub of the prime market, accounting for 43% of £500k+ Scottish agreed sales last year. However, prime prices fell by -0.8% in the three months ending December 2024, against a backdrop of more available stock. Here, the upper end of the market reduced in value more significantly. But first time buyers and the lower end of the prime market improved over the second half of 2024. There was also more demand for flats, although family houses in the £1 million to £1.4 million range remain popular.
Prime prices in the country markets surrounding Edinburgh bucked the national trend, with a 0.6% increase in the three months to December 2024. Meanwhile, there was an uptick in £500k+ agreed sales in the Lothians and Borders during the final three months of 2024 compared to the same months of 2023.
In the west, available stock levels are largely under control, especially in the city area of Glasgow with larger homes spending less time on the market in recent months compared to 2023. Prime Glasgow City prices ended the year 1.2% higher compared to the end of 2023. Alongside price growth, there was also an uptick in £500k+ agreed sales in the hotspots of Newton Mearns, Bothwell, West End, Park, Bearsden and Milngavie.
Prime prices outside Glasgow witnessed a slight annual increase of 0.3% during Q4 2024. Meanwhile, £500k+ agreed sales activity was strong towards the end of the year in Ayrshire, Dumfries and Galloway, Helensburgh and the Loch Lomond area.
Prime Perthshire prices were -3.8% lower in Q4 2024 compared to Q4 2023, which was among the lowest across prime regional markets outside London. The market here is more challenging above £750,000 although there is still a shortage of good quality rural homes to supply underlying demand. However, buyers are much more hesitant and are avoiding properties that require renovation.
In Angus and southern Kincardineshire, the number of agreed sales from £350,000 to £500,000 was 56% higher in Q4 2024 compared to Q4 2023 however the market got quieter towards the end of the year, especially following the UK and Scotland Budgets. There is an expectation of new buyers coming into the market during Q1 2025, subject to further interest rate cuts.
Available stock levels have been level in the Aberdeen area, with more committed buyers. House prices were largely unchanged throughout 2024 as a consequence. The Aberdeen area market is mostly active between £200,000 and £750,000 and continues to be led by the sought-after AB15 postcode, which includes the city’s West End, Cults, Bieldside, Countesswells and Kingswells areas.
The outlook is positive for Scotland’s prime market, with 7% more buyers registering with Savills in 2024 to purchase a prime Scottish property compared to 2023.
However, various caution signs in aspects of the wider economy, such as lacklustre GDP figures, a slight rise in inflation and a drop in mortgage approvals at the end of 2024 mean the year ahead is not without its risks.
Indeed, our most recent client survey suggested that buyer sentiment had softened slightly over the course of 2024 in the wake of the general election and the immediate aftermath of the Budget.
Furthermore, second-home hotspots will remain price sensitive given the increase in the Land and Buildings Transaction Tax Additional Dwelling Supplement from 6% to 8% announced the Scottish Budget at the end of last year.
That said, the prime market will be underpinned by demand for family homes in commutable areas with access to schooling.
Savills has forecast price growth of +2.5% for 2025 for prime Scotland markets, contributing to a five-year projected growth of +21.0%, outperforming other prime regional markets.
< View our latest Q4 2024 updates here.
For more information, please contact your nearest Scotland office or arrange a market appraisal with one of our local experts.