Prime property market in Scotland remains price sensitive

The Scottish country house property market remains price sensitive and this has kept a lid on price growth over the last year, according to the latest index.

Overall prices fell by 0.2% between April and June 2017 and they are now 0.9% below where they were a year ago and more than 20% below previous peaks, the data from the Knight Frank prime Scottish index shows.

However, the index report also shows that there has been a 7.6% increase in the number of new buyers registering to purchase Scottish country houses in the first six months of 2017 year on year.

The report says that as a result the prime property market is looking increasingly good value while the lack of momentum in terms of price growth over the last year reflects the fact buyers remain price sensitive.

It also points out that more recently, uncertainty surrounding the political and economic landscape has also weighed on growth. However, while prices are fairly unmoved, this hasn’t dampened demand.

Ran Morgan, head of Scotland Residential at Knight Frank pointed out that the number of viewings was 16.5% higher over the same period. ‘The main point for current and prospective vendors to note is that the market is still extremely price sensitive, but that well-presented and correctly priced homes are still selling well,’ he said.

‘The gap between prime prices in Scotland and the rest of the UK remains large, and we expect the relative value offered in Scotland as a result will underpin sales this year,’ he explained.

He added that the result of the general election may have the unintended consequence of reducing some of the political uncertainty surrounding a both a hard Brexit and a second independence referendum which has kept a lid on price growth.

The report also says that while prime Scottish country house prices remain more than 20% below previous market peaks on average, it looks relatively good value compared with markets elsewhere in the UK.

‘The recent weakness of sterling relative to other currencies has also contributed to a rise in interest in Scottish property from both international buyers and expats. While there remain challenges related to property taxation, politics and the economy, Knight Frank activity data suggests that demand has been robust so far in 2017,’ the report concludes.