Reasons to keep an eye on Scottish property trends

The Scottish property market has shown resilience this year, but what is next?

With inflation having eased, and slowly edging closer to the Bank of England’s 2% mark, you may be wondering how this could affect property prices.* We take a look at what’s currently happening in the sector, and what may be in store for 2024.

Whether you’re a landlord, a seller or a buyer. Here’s all you need to know…

What is currently happening to house prices?

Starting off with the housing market, we saw that towards the end of 2023, buyer demand improved in comparison to 2022’s figures - a sign of growing consumer confidence, which sets us up for a positive start to 2024.* The time to sell a property is 17% lower than pre-pandemic levels and, although house price growth stagnated towards the tail end of 2023, they are still 24.7% higher than in 2019.* It’s difficult to say what will happen next, but the current state of the market remains healthy and robust.

To give you a brief snapshot of the current housing market, the Scottish average asking prices experienced a 1.1% year-on-year increase, reaching £180,733, but a monthly change of -2.7%. The time to sell, however, remains way ahead of all other regions in the UK with just 37 days.†

Overall, Rightmove reported a -1.9% monthly decrease in UK asking prices, now reaching an average of £355,177. Although these seasonal variations and decreases usually occur at this time of the year, this decrease in asking price is greater than usual, as sellers are getting more competitive to attract the right buyer. Year-on-year, however, the average asking price for the UK is just 1.1% lower and buyer demand is up by 6% when compared to last year.†

Across the UK, seven out of the 11 regions have, on average, higher asking prices than the previous year, with the North West having the biggest lead with +1.5%.† The differences from region to region further exemplify how important it is to chat and work with your local agent, who will be able to advise you more specifically on what’s happening around you. Contact your local branch today.

Going forward, Rightmove predicts that average asking prices will decrease by 1% in 2024, as the seller’s market remains competitive.† Additionally, we continue to expect to see more realistic expectations about pricing on seller’s behalf with continued modest growth in supply of properties throughout 2024.* If you’re a buyer, this means you’ll have an even greater choice, with more opportunities to find your dream home or ideal investment.

What’s in it for landlords?

Rents in Scotland have seen some of the strongest increases over the past year. In September, it even ranked with the highest-yielding rental regions in the UK. According to Zoopla research, the average gross yield was 7.1%.^^

Even with last month’s dip of -1.2% in average rents across Scotland, the current average rent is £911 pcm - a year-on-year increase of 8.45%.† Competition among tenants for properties remains high, particularly in cities such as Glasgow. In a Goodlord survey, 76% of tenants responded that they found it difficult to find a rental property.^^

Reasons to keep an eye on the Scottish market

Whether you're a seasoned investor, upsizing, downsizing or a first-time homebuyer, there are many reasons why you would want to ensure you know what’s going on in the Scottish property market to unlock any homeownership or letting opportunities.

Diverse investment opportunities

From historic city centres to picturesque rural landscapes, Scotland has much to offer anyone who’s moving between Scottish cities or thinking about moving to Scotland. Cities like Glasgow, Stirling and Dundee offer a vibrant urban lifestyle, while still being close to natural and serene Highland landscape. The diversity in property types caters to various buyers and investor preferences, making it an attractive prospect for those looking to buy a home and landlords seeking to build a well-rounded portfolio.

Government incentives and support

The Scottish Government has introduced various incentives and buyer support to help the property market remain strong, which may be another reason why the Scottish market has remained as robust as it has.

Scottish schemes include:

• Affordable Housing Supply Programme (AHSP):
  This programme is committed to delivering 110,000 affordable homes by 2032, further helping boost the property market and encouraging those wanting to buy to do exactly that.

  This programme is further supported by the rural and islands housing action plan, that helps to ensure people in rural and island areas have access to high quality affordable housing.



• LIFT Open Market Shared Equity Scheme:
  The Low-cost Initiative for First Time Buyers (LIFT) has already helped 12,000 people get onto the property ladder in Scotland via their two schemes: the Open Market Shared Equity (OMSE) and the New Supply Shared Equity scheme (NSSE).‡ Although applications for 2023/2024 have now closed, we’ve added this to the list as, depending on the Scottish Government’s budget decisions, the scheme may receive new funds for 2024/2025 and re-open their application.


• Land and buildings transaction tax (LBTT) holiday for first-time buyers:
  Although this relief for first-time buyers has been in place for a number of years, there is merit in mentioning it, as it is an encouraging factor for those looking to step onto the property ladder. The LBTT holiday means that first-time buyers do not need to pay the additional tax on properties up to £145,000. For more information on the LBTT relief, read our guide and click here.

Robust growth in property prices and rents

Over the past years, Scotland has experienced steady growth in property values, outpacing some other regions in the UK. When comparing the average price of a residential property in Scotland in 2021-22 to this year, they’ve increased by 7.1%.‡ This upward trajectory further points towards a resilient market that withstands economic fluctuations, and is a view supported by David Plumtree, Connells Group Estate Agency CEO. He comments that “house prices have been on a steady upward trajectory for a number of years. When looking at the smaller picture of year-on-year or month-on-month, it’s easy to see a cooling of the market and assume this is bad news, but when we zoom out and consider the data we have over a number of years, we can see what’s actually happening.”^

Many predicted large house price falls in 2023, but the housing market has shown surprising resilience, especially in Scotland, even with the challenges of increased interest rates impacting buyers and sellers alike. First-time buyers and cash buyers have been leading the way on this and are still finding their dream homes, making up 2 in 3 sales – a trend that will be interesting to follow in the next year.† Colin Bradshaw, CEO of TwentyCI comments that “the property market’s ability to adapt and evolve is what’s keeping the wheels moving. There are some optimistic signs on the horizon, with confidence from buyers and sellers on the rise alongside increased competition in the mortgage market.”**

With the Scottish market being the most resilient of all the regions in the UK, it will be well worth keeping an eye on it in 2024. Additionally, we can help you make informed decisions on your property needs and, as a landlord, we can help ensure that your property portfolio remains a solid long-term asset. Get in touch with your local branch today.