Lothian property market defies political uncertainty as Scottish housing sales break £18 billion
Property sales across Lothian maintained their momentum during the final part of 2018 as the Scottish housing market once again proved its resilience in the face of both domestic and international political issues, with sales breaching the £18 billion barrier last year.
During a year dominated by Brexit uncertainty, markets across the country remained busy, with the country enjoying its best spell of growth since the financial crash in 2008. Across Scotland as a whole, average prices, sale volumes and overall market values all rose in the last three months of 2018. Overall, the value of property exchanging hands in Scotland during 2018 reached £18,133,170,202, a rise of over £400,000,000 on 2017.
Edinburgh secured its spot as the most expensive area in the country for the third consecutive quarter with prices rising 9.3% year on year, hitting £272,989, the Capital’s highest price in 2018. Sales in Edinburgh also broke the £3 billion mark.
The latest figures from Aberdein Considine’s Property Monitor highlighted the strength of the housing market across Edinburgh, East, West and Midlothian with the total value of property changing hands during 2018 rising £46 million to £4.4 billion. Sales in the final three months of the year reached £1.3 billion, the highest quarterly figure recorded in 2018.
The market in West Lothian continued its own resurgence with a fourth consecutive rise in quarterly year on year average prices. The area followed up a 4% rise in the third quarter, with a further 4.6% uplift in the cost of a home to £175,653, the highest quarterly figure it recorded in 2018. The market value of homes sold during the year reached £536 million, an increase of £12 million on the same period last year.
East Lothian enjoyed a 27.5% rise in the number of properties changing hands in the final quarter and Midlothian saw a 10.5% increase in average prices to £224,842, its highest level in 2018.
The lack of stock coming to the market, once a feature of the biggest cities, is also beginning to filter through to other parts of the country, with more provincial areas now experiencing rapidly rising prices, with the average cost of a home in Scotland rising 3.3% year on year to £174,290.
Dundee experienced an 8.7% increase in the number of properties sold and a 9% rise in the value of homes changing hands at £109,752,853.
Likewise Angus saw an 11% rise in average prices in the final quarter, reaching £173,556 as well as a 4% increase in property changing hands at £95,019,433.
The shortage of homes for sale, combined with increasing demand drove average prices in Highland to £195,006 in November, the highest it reached in 2018. Clackmannanshire recorded the biggest jump in sale values with a 40% leap in the final three months of the year, a record for the Property Monitor.
Glasgow experienced a fourth consecutive rise in average prices to £162,291, with sales of property hitting £525 million in the final quarter.
Despite the broader health of the Scottish property market, research conducted by Aberdein Considine has revealed that the lack of clarity on Brexit as well as property tax policies are affecting both the levels of confidence among consumers and property buying decisions.
A survey of more than 1,000 individuals in Scotland, the biggest since the firm began publishing the Property Monitor at the start of 2017, found that 50% of those asked said they anticipate a decrease in the value of their home post Brexit. This was the highest figure for 2018, and a strong indication of what appears to be diminishing confidence in the UK Government’s attempts to secure a positive Brexit outcome. Only 3% believed that Brexit would increase house values.
Furthermore, asked if the Additional Dwelling Tax would discourage them from purchasing an additional property in Scotland, 52% agreed that it would, up from 45% in the third quarter. The Scottish Government announced in its December budget that this tax would rise from 3% to 4%.
Commenting on the latest figures, Jacqueline Law, Managing Partner, Aberdein Considine remained cautiously optimistic about the year ahead.
“These figures demonstrate that the wider market has largely recovered from the difficult days of the financial crash but we cannot ignore the uncertainty which Brexit presents.
The market in Edinburgh has for many years appeared immune to political and financial volatility but there remains a significant shortage of property and increasing demand, all leading to rising prices. The rest of Lothian certainly seems to be benefiting from this.
Whatever the outcome of Brexit, families and individuals still need homes to live in and properties will continue to be bought, sold and rented.
Homeowners and businesses could definitely benefit from a clearer understanding about what the months and years ahead have in store, and hopefully the next few weeks will bring some much needed clarity.”
Further evidence of strong demand for homes, particularly in Edinburgh and Glasgow is reflected in the rise in rental costs in both cities. The latest figures from residential lettings site Citylets highlighted the average cost of renting a home in the Capital had risen by 7.8% to £1095 per month whilst rentals in Glasgow had grown by 3.9% to £771. Recent estimates suggest that the number of families living in a private rented sector home was around 90,000.