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Market remains resilient

Million pound-plus home sales at highest since 2008

Demand for quality homes at the top of the market remains high

The number of £1 million-plus homes being traded in Scotland is at its highest since 2008, with Edinburgh’s dominance increasing, according to new figures.

The research from Savills reveals there were 231 transactions of homes in this bracket in the year to the end of June, including 19 above £2m.

These are the highest annual numbers since the 12 months ending June 2008. Whereas 2018 saw no transactions above £3m, there were two in the first six months of this year. 

Furthermore, these figures look set to rise as a number of high value deals are yet to be recorded by Registers of Scotland. Strong demand at the top end of the market is further evidenced by a 9% rise in the number of buyers during 2019 that have registered with Savills in Scotland to buy a property at £1m and above.

Faisal Choudhry, Savills head of residential research in Scotland, said:  “Scotland’s residential market overall has remained resilient in the face of political uncertainty.

“A 3% rise in transactions across all price bands pushed the annual number to just under 103,000 during the 12 months ending June 2019, which was the highest since 2008.  Year-on-year growth in prime Scottish values during Q2 2019 was up 2%, compared with a drop of 0.4% across the rest of the UK.” 

Edinburgh accounts for two-thirds of Scotland’s million pound market and almost 80% of transactions over £2m. The inner suburbs of Grange, Morningside and Merchiston are the hubs of Edinburgh’s million pound market. They have accounted for 48 transactions in the last year, eight more than the previous year.

Murrayfield and the area around Belgrave Crescent and Buckingham Terrace has also seen million pound transactions jump (from 14 to 27).

Supported by new build activity at the landmark Donaldson’s development in Edinburgh’s West End, this means these areas saw more million pound transactions than the New Town and West End, where sales have recovered since the introduction of Land and Buildings Transaction Tax.

Despite having limited opportunities at the top end, million pound activity in Edinburgh’s New Town and West End reached the level last seen during the peak of the market in 2008.

By contrast, million pound transactions in Greater Glasgow fell from 29 to 26 over the past year.   Slight falls in the number of sales in the city, Bearsden and Milngavie reflect a lack of properties being launched on to the market to meet a latent demand. This is further compounded by a lack of downsizing options for some sellers at the top end.

Political uncertainty is beginning to be felt in some quarters

– Cameron Ewer, head of Residential for Savills Scotland

Encouragingly there were 11 transactions at £1m and above in the Aberdeen area, the highest number for three years following the downturn of the energy sector. The increase mainly took place in Aberdeen’s West End and the affluent suburbs of Cults, Bieldside and Milltimber.

Elsewhere in Scotland, the Lothians saw 12 million pound transactions and there were 10 in Fife, in St Andrews and the East Neuk. Perthshire and Stirlingshire saw slight improvements in their respective markets. Argyll and North Ayrshire both saw their first million pound transactions in two years.

The Borders and Highland witnessed just one million pound transaction each over the last year, compared to six and four respectively in the previous year. This reflects the fickle nature of the million pound market in rural locations (mainly driven by overseas buyers), where demand is discretionary. 

Cameron Ewer, head of Residential for Savills Scotland, said: “Looking ahead, a rise in registered buyers this year gives reasons for some optimism. But heightened uncertainty over the outcome of Brexit suggests the UK market will remain price sensitive.

“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.

“Selling times across Scotland’s cities are slightly higher than last year and mainstream house price growth has slowed over the course of 2019. We therefore expect a more considered market for the remainder of 2019. Pricing remains key and sellers will have to be pragmatic in order to align their price expectations with buyers.”

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