According to the latest Prime Scottish Property Index from real estate firm Knight Frank, prices are up by 2.8% on an annual basis in the year to March, the largest annual gain in prices in six years.
One factor that has put upward pressure on prices is a lack of stock across the market and combined with confidence among buyers and vendors the market is improving.
Tighter stock levels have coincided with an increase in the number of buyers registering their interest in purchasing a prime property in Scotland and the data shows that there was a 36.5% rise in the number of new applicants over the three months to March 2014 compared to the same period a year earlier.
While the property markets in key Scottish towns and cities, such as Edinburgh, have been the biggest beneficiaries of this increased demand, there are indications that this is filtering out to the wider prime market.
Ran Morgan, head of Knight Frank’s Scottish residential department, said that positive signs are emerging. ‘The bulk of sales tend to be concentrated in the sub £1 million price band, although we are seeing a pick up in interest among buyers for well presented, large family homes above this level. However, a lack of stock continues to be an issue,’ he pointed out.
‘We have noticed a definite hesitancy on the part of some vendors to bring their homes to market before the result of the Independence Referendum in September 2014 is known,’ he explained.
Potential buyers seem less deterred by the Referendum result, however. The number of property viewings taking place across the prime Scottish market over the last three months was more than double the number conducted over the same period last year.
The Knight Frank analysis of stock levels in the prime Scottish property market, excluding Edinburgh, reveals that there are 26% fewer homes on the market in March 2014 compared to the same point in 2013. Low stock levels, combined with rising demand from buyers, have helped put upwards pressure on prices.
In line with the wider recovery in the Scottish property market, the number of million pound residential property sales picked up markedly in the second half of 2013, according to official sales statistics from the Registers of Scotland.
Above £1 million, some 68 sales were agreed in the final six months of the year compared to just 37 between January and the end of June. The pick up in sales is reflective of the increasing confidence in the market.
Edinburgh had the most million pound residential property sales in Scotland in 2013 with 62, more than double that of any other local authority country. Aberdeen City and Aberdeenshire had the second highest number of such sales and accounted for 13% of the total market last year.
