The Scottish residential market is predicted to continue growing, but at a slower pace due to the recent economic uncertainty.
New research from property services firm Savills showed that house prices in Scotland are expected to grow by 15.7% over the next five years, compared with 12.9% across the rest of the UK.
According to data provider TwentyCi, there were 91.8% more agreed sales in Scotland between £500,000 and £1m, along with 124.3% more sales above a million, compared with the same period between 2017 and 2019.
This uptake has taken place against a backdrop of constrained availability, resulting in house price growth.
Prime Scottish prices rose by 2.2% in the three months to March 2022, putting them 8.9% higher than a year ago, and 15% higher than the start of the pandemic in March 2020.
Savills found that prime prices in Edinburgh and Glasgow are now sitting 16.3% higher that the peak of the market in 2007/8, whereas Scotland’s village and rural areas have further capacity for growth, at 14% lower than peak.
Faisal Choudhry, head of residential research in Scotland for Savills, said: “The number of new buyers registering with Savills to buy a Scottish property is a good indicator of future activity here – during the first four months of the year, this was 95.7% higher than the same period in 2019, with buyers of prime properties [above £500,000] leading the charge.
“There continues to be unmet demand for those looking for large properties in particular, and we anticipate it will be these equity-rich buyers who will support the market in the longer term as they are less impacted by higher costs of debt, rising inflation and the cost of living crisis triggered by the disturbing events in Ukraine.
“However, the rate of price growth is expected to slow across the board as the year progresses given this uncertain economic backdrop.”
He added: “While the supply-demand imbalance remains a feature of the market, the lack of suitable stock will support further price growth, and the North/South divide is set to narrow, with five-year growth of 15.7% in Scotland outstripping the 12.9% average for the UK.”
Don’t miss the latest headlines with our twice-daily newsletter – sign up here for free.