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Scottish prime property market relatively resilient, says Knight Frank

Scottish prime house prices fell by 1.3% in the fourth quarter of 2011 after a 1.5% decline in the third quarter and values are down 3.2% on an annual basis. Large country houses have fallen in value by 4.3% year on year, while cottages are down 1.5%, it shows.

But prices are still rising in the Scottish Borders, with a 0.2% increase between October and December and a 1.2% annual rise, but average values are down 7% year on year in the south west of the country and stock levels are up 10%.

The index also shows that prices in Edinburgh were down 1% in the fourth quarter, taking the annual decline to 2.8%. While average prices of country houses outside Edinburgh fell by 1.3% in the final three months of the year, a more modest decline than the 1.5% decline in the third quarter.

‘The prime market is hugely varied in Scotland but in general these figures show how tough market conditions have been in 2011. The further you go from London the more difficult life has been,’ said Ran Morgan, head of Knight Frank’s Scottish residential department.

‘As usual in such tough fiscal conditions, a two tier market develops. The best houses in the best areas continue to fare well. Oil has supported Aberdeenshire with some phenomenal prices paid for town houses in the City. Rural Aberdeenshire within commuting distance of the City has also done well with Midmar Castle being the marker sale of the year at £3 million,’ he explained.

He also said that Perthshire has performed relatively well as long as the properties are of quality and well priced. There has been no shortage of trade within the central belt which mainly appeals to domestic buyers but again this is incredibly price sensitive. Fife, Kinross and Stirlingshire have performed better than their commuting cousins south of the central belt.

But large Houses with comparatively little land, outside the commuting areas, have been the worst affected properties in the downturn. Those with land or an ability to run a business have traded satisfactorily. ‘Both in the city and rural markets we have been unseasonably busy with enquiries and offers during the recent weeks leading up to and including the festive period. This bodes well for 2012,’ he added.

Matthew Munro, partner in Knight Frank’s Scottish residential department, said that although values in Edinburgh’s prime residential market are down, activity has been steady throughout the year. The more recognised seasonal trading periods have been replaced by steady and continuous activity throughout the year with an uplift towards the end of the year.

‘Overseas buyers in particular are very much in evidence. These buyers clearly see Edinburgh’s prime housing stock as quality and good value. Our offices in Moscow and St. Petersburg have been particularly busy introducing buyers to our office here in Edinburgh,’ he explained.

‘Edinburgh’s residential middle market has seen the most resilience and shown genuine signs of improvement in terms of the levels of activity and volume of sales compared to the previous twelve months,’ he added.

Good quality flats in Edinburgh’s New Town and West End between £350,000 and £750,000 and family houses below £1,000,000 in all the residential areas of the city have been in demand with the greatest activity on the south side of the city.
‘Our experience confirms that any property that is professionally marketed and competitively priced will sell successfully,’ said Munro.