✓ 30 of the 32 local authority areas continue to see prices rise over the year
✓ Monthly growth rates are softening
✓ Top 5 local authority areas by value all set new record average price levels
Produced by Acadata on behalf of
Alan Penman, Business Development Manager at Walker Fraser Steele, comments: “At the end of August we reported that the average Scottish house price stood at £211,029 – at that point a new record high.
“This September we have seen the upward momentum continue. Scotland’s average house price at the end of September stands at £212,832, which sets yet another record, having risen by some £2,200 – or 1.0% – in the month.
“Five local authority areas in September were responsible for 58% of the positive movement in Scotland’s average house price. The five areas concerned, in order of influence, were South Lanarkshire, the City of Edinburgh, Glasgow City, East Dunbartonshire and Highland.
“More generally prices rose in 19 of the 32 Local Authority areas in Scotland. The largest increase in average prices, of 6.3%, was in Inverclyde. In second place on the mainland was East Dunbartonshire, with an increase in prices of 5.2%.
“There were plenty of high-value sales in East Dunbartonshire, with a number of detached sales taking place in Bearsden – located approximately six miles to the North West of Glasgow – the most expensive being on the Roman Road, priced at £1.3 million.
“This underlines how property at the top-end continues to underpin this growth as people opt for more space and continue to embrace working from home. September often provides momentum to the market too as it is not untypical for families to reassess their needs as the new school year gets underway.”
Commentary: John Tindale, Acadata Senior Housing Analyst
The September housing market
Scotland’s average house price at the end of September stood at £212,832, which sets yet another record, having risen by some £2,200 – or 1.0% – in the month. The 1.0% growth rate represents a slight softening from the 1.7% seen in August.
On an annual basis, average house prices have increased by close to £25,000 – or 13.2% – over the last twelve months. This is the highest rate of all four nations, and nine regions in the United Kingdom.
It doesn’t come as too much of a surprise to learn that house prices rose in September. Looking at the last seventeen years, house prices in Scotland have increased on thirteen occasions in September. Estate Agents frequently mention that housing activity picks up towards the end of the school holidays, as families potentially reassess their housing needs at the start of the new school year.
In addition, this year we also have the added impetus of the lifestyle changes associated with the pandemic and “working from home”, which has brought about a shift in housing preferences for larger properties, with space for home-working becoming a prime requirement.
The demand for larger premises has continued throughout September, and for some includes moving to Scotland from London, or from other major cities in the UK and beyond. However, the supply of larger homes coming to the market currently remains relatively low, which results in strong competition for those properties that do become available, hence keeping prices high.
We can see that prices reached a mini-peak in March 2021, immediately prior to the ending of the LBTT tax holiday on 1 April 2021. Average prices then started to fall, as buyers of high-value properties reduced in number (see Table 2). However, the reduction in high-value sales only continued through April and May, with June, July and August seeing a return of the higher-value transactions.
In July, August and September 2021, we can see that prices once again regained their earlier momentum seen during the second half of 2020, despite the savings arising from the LBTT tax holiday no longer being available.
Figure 1. The average house price in Scotland, for the period September 2019 to September 2021
Transactions analysis
Monthly transaction counts
The fall in the number of transactions for the period March 2020 to August 2020 is clearly visible. However, what is also clearly demonstrated is that the number of sales for each month from September 2020 to March 2021 has surpassed that of the same month in the previous six years.
In addition, the spike in sales that took place in March 2021 – as the tax holiday expiry date approached – is plain, although this total was exceeded by the volume of sales in October and November 2020, when monthly sales during the pandemic reached their peak.
Also clear is the fall in sales in April 2021, to levels below those in all previous years except for 2016 and 2020, indicating the extent to which buyers had managed to bring forward their purchases into March 2021 to take advantage of the tax holiday.
For the record, the peak in sales in March 2016 was also tax-related, and came one month ahead of the introduction of the then 3% LBTT surcharge (now 4%) on second homes and buy-to-let properties, which tax was pre-announced to commence from April 2016.
Sales volumes in April and May 2021 remained lower than the equivalent months in 2017 and 2019, and appear to have been roughly on a par with the levels seen in 2018. However, in July 2021 the number of properties sold once again appears to have been higher than the same months in the previous six years, although sales in August 2021 returned to 2017 levels.
Comparing total sales in 2020 with those of 2019, there was a 14% fall in the overall size of the market. However, looking at the number of transactions for the first eight months of 2021, and comparing with the same period in 2019 (2020 figures are distorted by the lockdown in the early stages of the pandemic), sales are up by 11%, although this does include the spike in March 2021, which will have enhanced the 2021 figures.
The city council says it is on track and committed to delivering on its ambition to deliver 20,000 affordable homes by 2027, despite the UK-wide impact on the development of affordable homes following the global pandemic.
In its Strategic Housing Investment Plan (SHIP) 2022-27 report being presented to the Housing, Homelessness and Fair Work committee next week (4 November) councillors will be asked to approve the proposals ahead of submission to the Scottish Government.
The SHIP 2022-2027 highlights the progress being made which includes the projection that 7,500 new affordable homes will be approved by 31 March 2022 and 5,790 completed. There are currently over 2,100 homes under construction on 34 sites across the city.
A ‘strong pipeline’ has also been identified of 11,118 affordable homes that could be approved for site start and 10,124 potential completions by 2027.
Despite over 18 months of disruption for the entire Scottish house building sector, it is anticipated that the delivery of the interim milestone of 10,000 homes will be achieved midway through 2023. There are currently 25 projects, equating to 1,456 approvals, that have been delayed, primarily as a result of the COVID-19 pandemic. Over 75% of these projects have just slipped into the subsequent year.
This comes in the wake of national pressures on the UK and Scottish house building sector. In the Scottish Government’s “Housing statistics quarterly update: September 2021” it sets out that in June 2021 affordable housing approvals were down 36%, compared to the same time last year. Affordable housing completions are also down 5% year-on-year, but when compared to 2019, there is a reduction of over 15%.
Added to this, as construction projects worldwide have recommenced post-pandemic, a surge in materials demand and prices has been seen which build on the pressures being seen as a result of the UK’s exit from Europe. The Office for National Statistics projects a rise of 7-8% in material prices, with increases for certain materials, such as timber, expected to more than double during the course of the year.
Councillor Kate Campbell, Convener for the Housing, Homelessness and Fair Work Committee, said: There are extreme pressures on housing in Edinburgh and a desperate need for more affordable homes.
“We’re doing all we can to drive forward our house building programme so that our residents can have permanent homes that are energy efficient, safe and affordable. There are constraints, from Brexit and Covid, which have had a severe impact on supply chains, material costs and the labour market, which are affecting housebuilding across the UK.
“That said, the good news is that this is the largest ever SHIP brought forward. It sets out a positive long-term picture and shows we are on track to deliver a programme for 20,000 affordable homes over ten years.
“We’ll continue to work hard with our housing association partners to build more homes for social rent. But we need to look at what more we can do. We were the first local authority to develop an Affordable Housing Policy through planning – where 25% of the land on any new development must be given for affordable housing. Now, through the City Plan, we’re proposing to increase the affordable allocation from 25% to 35%.
“We have a strong track record in delivering new social rented homes. This has resulted in an additional £36 million of grant funding being given to Edinburgh over the last five years. We’ll work hard to make sure this continues, alongside making the case to the Scottish Government for increased investment in social housing in our city.”
Councillor Mandy Watt, Vice Convener of the Housing, Homelessness and Fair Work Committee said:“The Edinburgh housing market has remained resilient throughout the pandemic, however the full impact of lockdown & the continuation of restrictions, combined with Brexit, on the wider economy & the job market is not fully known.
“Those on low incomes will continue to be the greatest affected and therefore affordable housing needs to play a key role in a green and sustainable recovery.”
In term of delivery, funding and land supply remain two key challenges for delivery. The SHIP will require £329.6m in grant funding, or £65.9m per annum on average, or a 29% required annual increase, based on current benchmarks in order to meet the overall ambition of 20,000 homes. The Council will continue to work with Scottish Government and its partners to stretch available grant funding as far as possible to maximise the number of social rented homes that can be delivered.
While our Registered Social Landlord (RSL) programme is almost entirely dependent upon private developers bringing forward sites for development through the Affordable Housing Plan (AHP), we’re looking to mitigate this risk, through our Land Strategy by working on 20-minute partnerships with private sector & RSLs, inviting interest from the private sector to bringing forward opportunities for Council led delivery and working closely with public sector partners.
Average house prices in Scotland reach new high of £211,029
All 32 local authority areas have seen prices rise over the year
Transaction levels in August at seven-year high
Monthly average increase is 1.8% (August), average annual increase is 12.1%
Alan Penman, Business Development Manager at Walker Fraser Steele, comments:“At the end of July, the average Scottish house price stood at £207,344 but by the end of August this figure was £211,029 – reaching a new record high, with a rise of £3,685, or just under 2% in the month. The race for space continues to support the prices of larger properties. The scarcity of this type of stock coupled with the continued high demand means prices remain strong.
“Property at the top-end has performed well throughout 2021 and there is no sign of any imminent let-up. We noted last month that the exceptional performance of larger properties was likely to continue and this month we have more evidence to support that view.
“People’s preference for more space and working from home has meant buyers have often sought properties that can accommodate new lifestyles. But we should remember that borrowers’ ability to afford these properties has in no small way been a result of the Land and Buildings Transaction Tax holiday earlier in the year, and the continued record low interest rates.
“In terms of the geographical performance of the Scottish regions, the area with the highest annual increase in average house prices in August was the Scottish Borders, where average prices have risen by 28.4%, which again reflects the fact that the mix of homes that have been sold in this area has trended towards the more expensive end of the market.”
Average House Prices in Scotland for period August 2020 to August 2021
Commentary: John Tindale, Acadata Senior Housing Analyst
The August housing market
Scotland’s average house price at the end of August stood at £211,029, which set a further record, having risen by some £3,685, or 1.8%, in the month. The 1.8% growth rate represents a slight softening from the six-year high of 2.7% seen in July.
As we reported last month, one of the main reasons for the current upward movement in prices is a result of the lifestyle changes associated with “working from home”, which has brought about a shift in housing preferences to larger properties, with space for home-working becoming a prime requirement.
The demand for larger premises has continued throughout August, and for some includes moving to Scotland from London, or from other major cities in the UK and beyond. However, the number of larger homes in Scotland available for purchase remains thin, with strong competition for those properties that do come onto the market, helping to keep prices high.
Looking at Figure 1 below – which tracks the average house price in Scotland – we can see that prices reached a mini-peak in March 2021, immediately prior to the ending of the LBTT tax holiday on 1 April 2021. Average prices then started to fall, as buyers of high-value properties reduced in number (see Table 2).
However, the reduction in high-value sales only continued through April and May, with June and July seeing a return of the higher-value purchases. This was perhaps assisted by those who had decided to move away from buying properties in England, where the threshold on tax savings had reduced to £250,000 at the end of June.
In July and August 2021, we can see that prices once again regained their earlier momentum, with monthly price increases more than matching those experienced during the final quarter of 2020, despite the savings arising from the LBTT tax holiday no longer being available.
Transactions analysis
Monthly transaction counts
Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to August 2021, based on RoS (Registers of Scotland) figures for the Date of Entry (Applications Date for August 2021). The fall in the number of transactions for the period March 2020 to August 2020 is clearly visible. However, what is also clearly demonstrated is that the number of sales for each month from September 2020 to March 2021 has surpassed that of the same month in the previous six years.
In addition, the spike in sales that took place in March 2021 – as the tax holiday expiry date approached – is plain, although this total was exceeded by the volume of sales in October and November 2020, when monthly sales during the pandemic reached their peak. Also clear is the fall in sales in April 2021, to levels below those in all previous years except for 2016 and 2020, indicating the extent to which buyers had managed to bring forward their purchases into March 2021 to take advantage of the tax holiday.
For the record, the peak in sales in March 2016 was also tax-related, and came one month ahead of the introduction of the then 3% LBTT surcharge (now 4%) on second homes and buy-to-let properties, which tax was pre-announced to commence from April 2016.
Sales volumes in April and May 2021 remained lower than the equivalent months in 2017 and 2019, and appear to have been roughly on a par with the levels seen in 2018. However, in July and August 2021 the number of properties sold once again appears to be higher than the same months in the previous six years.
Comparing total sales in 2020 with those of 2019, there was a 14% fall in the overall size of the market. However, looking at the number of transactions for the first eight months of 2021, and comparing with the same period in 2019 (2020 figures are distorted by the lockdown in the early stages of the pandemic), sales are up by 12%, although this does include the spike in March 2021, which will have enhanced the 2021 figures.
Scotland transactions of £750k or higher
The above table shows the number of transactions per month in Scotland which are equal to or greater than £750k. The threshold of £750k has been selected as it is the breakpoint at which the highest rate of LBTT becomes payable.
The table shows that there have been 648 sales in excess of £750k during the first eight months of 2021. By coincidence this happens to be the same number of sales over £750k that took place in the whole of 2020, i.e. in 2021 the same total as in 2020 has been reached after just eight months. It can also be noted that the 2020 total was the highest number of sales of properties in excess of £750k of the previous six years.
The reasons for this dramatic increase in top-end sales in 2021 are, as previously discussed, partly to do with the change in preference for larger properties. Home movers were thus encouraged to move to premises which better suited their updated needs. But additionally, we should mention the record low interest rates, which made the purchase of a top-end property more affordable, as well as the tax savings associated with the LBTT holiday, up to the end of March 2021. This encouraged the whole market to be more adventurous in its outlook.
As reported last month, we should also point out that one tends to get more “bang for one’s buck” in Scotland than in England. For example, the recent purchase of a £1 million home in the Scottish Borders included 5 bedrooms, 2.8 acres of garden grounds and 5 acres of grazing paddock. In London £1 million will, in some boroughs, enable you to purchase a three bedroomed Victorian terrace, with minimal garden space. It is therefore little wonder that some Londoners are looking to move to Scotland, if the workplace allows.
Local Authority Analysis
Annual change
The average house price in Scotland has increased by some £22,850 – or 12.1% – over the last twelve months, to the end of August. This is 1.4% higher than the 10.7% recorded one month earlier, and is the highest rate seen since March 2016, that date being just ahead of the introduction of the LBTT Additional Dwellings Supplement of 3% – which was introduced on the purchase of buy-to-let properties and second homes in Scotland (a rate which was subsequently increased to 4% on 25 January 2019).
This increase in the rate of annual growth in house prices comes as something of a surprise – we had assumed that since the ending of the LBTT holiday in March 2021 prices would begin to fall gently. However, it would appear that the shift in housing preferences for larger properties – with space for home working – rather than commuting to places of work, continues to influence strongly the current housing market.
In August 2021, all 32 of the local authority areas in Scotland have seen their average prices rise over the previous twelve months.
The area with the highest annual increase in average house prices in August was the Scottish Borders, where average prices have risen by 28.4%. This is not to say that each individual property sold in the Scottish Borders over the last year has increased in value by 28.4%, but rather the mix of homes that have been sold in the area has trended towards the more expensive end of the market. For example, in the Scottish Borders over the last three months there have been 12 properties sold with a value in excess of £750k, compared to just 2 such sales during the same three months in 2020.
Monthly change
In August 2021, Scotland’s average house price rose by £3,685, or 1.8%, and now stands at £211,029. This rise is smaller than the £5,530 increase seen in the previous month of July, indicating a softening in the rate of price growth over the summer.
Prices rose in August 2021 in 24 of the 32 Local Authority areas in Scotland, down from the 28 areas which saw prices increase in July. The largest increase in average prices in August, of 5.9%, was in Stirling, although this increase was assisted by the sale of a £2.4 million, nine-bedroom detached home, on the outskirts of Strathblane.
On a weight-adjusted basis, which takes into account both the increase in average price and the number of transactions involved, 5 local authority areas in August were responsible for 52% of the positive movement in Scotland’s average house price. The five areas concerned, in order of influence, were the City of Edinburgh, Glasgow City, Perth and Kinross, Aberdeen City and Stirling.
It is perhaps apposite that Aberdeen City appears in the top five authorities with the highest increase in prices in the month, as increases in oil and gas prices have been particularly newsworthy of late. All property types in Aberdeen City have experienced increases in their average prices in August, with the largest increase being seen in flats, up from an average £115k in July to £121k in August. Overall, the highest average property prices in Aberdeen occurred in March 2015 at £259,125, compared to an average £202,189 this August. At the time of the record prices in Aberdeen, the average price of flats in the city had reached £205k – clearly there is still some way to go before Aberdeen City’s housing market returns to its previous record levels.
Peak Prices
Each month, in Table 3 above, we highlight in light blue the local authority areas which have reached a new record in their average house prices. In August there are 16 such authorities, up from 12 in July. It is noticeable in Table 3 that eight of the top ten local authority areas ranked by price have reached new peaks, reinforcing the proposition that the main drivers of the current price increases seen in Scotland are associated with the price competition being experienced at the top-end of the housing market.
We can note that, in August 2021, Scotland’s overall average house price has itself also reached a new record level.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending August 2021. As reported above, all 32 local authority areas are reporting an increase in their housing values over the last year. The highest increase over the twelve months to August 2021 was in the Scottish Borders at 28.4% and the lowest in the Shetland Islands at 0.7%.
Residential developer HUB and Bridges Fund Management, a sustainable and impact investor, have acquired a ‘significant’ 2.6-acre site on Leith’s Baltic Street.
The site has an existing planning permission for a student residential development, secured by vendors Sundial Properties and local architects Michael Laird Associates.
HUB intends to reconfigure the proposal to deliver a residential-led scheme, comprising of Build to Rent apartments with a variety of mixed commercial uses at ground floor level.
HUB will work with the Council and local stakeholders to build upon the existing consent, maintaining the established design narrative, whilst enhancing the proposals to deliver a residential scheme that maximises the site’s potential.
This is the ninth deal on which HUB and Bridges have partnered and builds on their successful track record of delivering well-designed, community-focused residential schemes.
The deal is HUB and Bridges’ second acquisition in Edinburgh, following their recent purchase of the 1.5-acre Beaverhall site in Canonmills, where they are currently developing plans for a mixed-use scheme incorporating build-to-rent homes and affordable, contemporary studio space for the area’s local artistic community.
The deal also continues HUB’s expansion into key cities across the UK, with schemes already underway in Leeds and Digbeth, Birmingham.
Building on HUB and Bridges’ strategy of delivering homes in well-connected locations, the site is ideally located adjacent to Edinburgh’s new Tramline extension, due to open in late 2022.
The new route will connect the port in the east, through the city and to the airport in the west, meaning that residents at HUB’s scheme will have easy access to the heart of Edinburgh and beyond, whilst enjoying the lifestyle offering of the city’s most vibrant neighbourhood.
Just five minutes’ walk from the waterfront, the site offers easy access to numerous independent shops, bars and restaurants, as well as music and arts venues.
Robert Sloss, CEO and co-founder of HUB, said: “As a resident of Edinburgh, I am particularly happy that HUB is further investing in our capital city.
“Leith is full of creativity and innovation, and exemplifies exactly what HUB is looking for in terms of ‘lifestyle’ locations. We look forward to bringing our proven experience in delivering beautifully designed, mixed-use schemes to this fantastic site, building upon the existing proposal to deliver a great new place to live.
“We are sensitive to the legacy of the historic gasworks and are excited to rejuvenate it into a modern living quarter for Leith.”
Simon Ringer, Head of Property Funds at Bridges Fund Management, said: “We are delighted to complete this second investment in Edinburgh, a city where there is strong demand for more high-quality, sustainable lower-cost homes.
“Leith is a really exciting area, and we want to create a development that complements this site’s rich heritage and benefits the local community.”
HOUSE hunters are prioritising green areas and more space over traditional city centre dwellings in the latest market review by property experts, Rettie & Co.
According to Rettie & Co’s. Scottish Housing Market Summer Review, demand for East Lothian homes is on the rise, while homes brought to the market in the region last year fell by 28% against 2019 figures.
The property specialists believe the change in attitudes can be attributed to a greater acceptance of the hybrid working model.
With more companies offering the flexibility of working from home, potential buyers are opting for more value for money by seeking properties out with Edinburgh.
It comes after the firm’s latest 140 home development in Musselburgh, The Wireworks, in partnership with property developer Dundas Estates, has received 600 enquiries in just 3 months.
Marketing Account Manager at Rettie & Co., Ross Matheson, said: “We are seeing a greater number of potential buyers enquiring about homes out with the major cities across Scotland.
“This can be attributed to the changing attitudes to the working environment post-pandemic. With a greater acceptance of working from home, we are finding buyers are willing to live further from large cities in search of more spacious homes and greater green space.”
According to statistics from Rettie & Co. the average price of a house in Edinburgh stood at around £282,420 last year, while the average property price was close to £10,000 cheaper in East Lothian at around £272,268.
Ross, said: “Musselburgh is proving to be a very popular destination for potential buyers. We have recently had a spate of enquiries in and around the area.
“Being a commuter town just outside of Edinburgh, Musselburgh offers the best of both worlds; city convenience with an abundance of green space and amenities such as the River Esk, nearby beaches and the Musselburgh Racecourse, as well as the renowned Luca’s Ice Cream parlour.”
Head of Sales & Marketing at Dundas Estates, Craig Fairfoull, said: “It is important that we meet the demand for housing in what is becoming an ever-popular destination in the east of Scotland.
“With that in mind, we are investing heavily in the local community over the course of construction; we are delighted to be working alongside Rettie & Co.”
Dundas Estates, through a partnership with Tesco, East Lothian Council and NHS Lothian, acquired The Wireworks site after receiving planning permission to regenerate the former Brunton Wireworks site and neighbouring land in 2008.
The development will have the capacity to store 140 bicycles in internal and external bikes stores. Electric car charging facilities will be available throughout the development. Private gardens and balconies will also be available at various apartments.
The Livingston-based firm is committing, through Section 75 payments, to contribute up to £400,000 along with the other partners which will be invested into local schooling and infrastructure.
To learn more about Dundas Estates’ Wireworks development, call 0131 243 3858 or email: thewireworks@rettie.co.uk
£10m to help people worst affected by pandemic to avoid eviction
Councils have been given £10 million to provide grants to tenants who have fallen behind on their rent as a result of the pandemic and are at risk of eviction.
The grants will help tenants who are struggling financially as a direct result of the pandemic, allowing them to reduce or pay off their rent arrears. They will be available to tenants in both the private and social rented sectors.
This is part of a package of measures available to local authorities to prevent homelessness, alongside Discretionary Housing Payments and advice on maximising income. The grants also come on top of the Scottish Government’s £10 million Tenant Hardship Loan Fund.
Housing Secretary Shona Robison said: “We have been doing all we can to support tenants who are struggling as a result of the pandemic, and this latest funding takes our total housing support to almost £39 million.
“These grants will support tenants and landlords who are willing to work together to address rent arrears and agree a repayment plan to ensure the tenant is able to avoid eviction.
“Councils have substantial experience in supporting people who have fallen behind on their rent, and are therefore well placed to work with both tenants and landlords in making use of this grant fund. Anyone who has been financially impacted by the pandemic and needs help to avoid eviction should contact their local authority housing department to discuss their circumstances.”
Councillor Kelly Parry, COSLA Community Wellbeing spokesperson, said: “We are working closely with the Scottish Government to support tenants through the grant fund.
“The pandemic has resulted in some facing a significant loss of income which has resulted in a proportion of these developing rent arrears. The fund is limited and therefore will be targeted at those most at risk of eviction, but will allow local authorities, tenants and landlords to work together to stay in their homes and prevent homelessness.
“Councils have a lead role in supporting a fair and inclusive recovery. Enabling people to sustain their tenancies helps maintain their important community connections.”
Nearly £1.5million will be allocated to Edinburgh to help those in social and private tenancies at risk of becoming homeless.
The aim of the fund is to provide an additional tool for the Council to help save tenancies, create sustainable housing solutions for individuals and prevent homelessness, alongside its other initiatives in place.
This includes the Council’s Private Rented Service (PRS) Team, which looks to help private renters keep their existing tenancy or to move to either a new private or mid-market rent secure tenancy, and the ‘multi-disciplinary response’ team which helps Council tenants who are struggling to maintain their tenancy or falling into rent arrears.
In addition Edinburgh Help to Rent, which is a service the Council contracts Crisis to deliver, provides rent deposit guarantee bonds.
Under Scottish Government guidelines, local authorities have to allocate the Tenant Hardship Grant Fund by the end of this financial year (March 2022). The Council is currently assessing eligibility criteria in order to support those most at risk.
Councillor Kate Campbell, Convener of the Housing, Homelessness and Fair Work committee said:“This money from the Scottish Government comes at a critical time. Between the cut in Universal Credit, the national insurance increase, the end of furlough, rocketing household fuel bills due to the energy crisis, and now the fuel crisis – households are being hit hard.
“We will use this money to help people who have fallen into rent arrears during the pandemic, to help prevent evictions, homelessness and the burden of debt being placed on vulnerable households. This is a lifeline that will help people to stay in their own homes.
“Our Private Rented Sector Team has stopped 427 households from becoming homeless in the last 18 months, while our multi-disciplinary response team is successfully supporting our council tenants who’ve fallen into arrears. This funding from the Scottish Government means we can do even more to prevent families and households becoming homeless.”
Councillor Mandy Watt, Vice Convener of the Housing, Homelessness and Fair Work committee said:“The work being done by the Council and in collaboration with partner organisations like Crisis has already made a big difference to preventing people from becoming homeless. But there is still more that needs to be done with around 6,000 people currently homeless in our Capital.
“As we come out of the Covid-19 pandemic, it could become even more difficult to find suitable accommodation for everybody who needs it. So the work of our prevention teams will be more important than ever.
“We will be working to identify those most at risk without delay because many people are already in financial difficulty and it’s likely to get worse as winter weather and rising energy prices put more strain on household budgets.”
Nina Ballantyne, Citizens Advice Scotland Social Justice spokesperson, said: “The Citizens Advice network saw a real spike in demand for housing-related advice during the pandemic. Our analysis suggests almost 300,000 people in Scotland missed a housing payment last year because they ran out of money before pay day.
“We called for more support for tenants and are delighted to see this fund launch – we’d now encourage people to seek advice on what support is right for them and make use of all the options available.”
Local advice is available from Granton Information Centre. Telephone 0131 552 0458, 0131 551 2459 or email info@gic.org.uk
Port of Leith Housing Association (PoLHA) has secured an internationally recognised excellence award from the European Foundation for Quality Management (EFQM).
EFQM’s Recognised for Excellence status enables organisations to evaluate and demonstrate efforts to improve performance against a range of globally recognised definitions of excellence.
PoLHA achieved a Five-Star Excellence Award, following a rigorous, independent assessment process which highlighted the organisation’s main strengths and areas for improvement.
The EFQM Assessment Team identified a wide range of positive practices across customer service, strategic planning and staff engagement among PoLHA’s 107 employees.
The organisation was also praised for the flexibility and responsiveness with which it met the impact of Covid-19 while simultaneously proceeding with ambitious plans to undergo an organisational review and launch a new strategic plan.
PoLHA’s Group Chief Executive, Heather Kiteley, said: “EFQM assessment provides a robust means with which to measure our performance as we work to provide affordable homes and life-changing services and create brilliant communities in Leith and north Edinburgh.
“The Five-Star Excellence Award is testament to the hard work of our staff team, who were praised for their sense of purpose and commitment to high standards of customer service. Our ambition is to push on and meet the challenge of embedding even more good practices to drive continuous improvement across the Association and the rest of our Group.”
Janet Robertson, EFQM Director, Scotland said: “We are delighted to see Port of Leith Housing Association awarded 5-Star Recognised for Excellence.
“PoLHA demonstrated a clear purpose and commitment to delivering high standards of customer service. Their flexibility demonstrated in response to the Covid pandemic, and the dedication to their people during this time of change is a further testament to their drive for excellence. We are proud to recognise PoLHA as a leading organisation in Scotland and a valuable member of our EFQM community.
“Thanks to everyone who took part in the Recognition process, and many congratulations on the well-deserved progression from four to five stars.”
Average house prices in Scotland reaches new record level – £207,877
July sees largest increase in average price in a month since March 2015, up by £6,000
Lack of properties on the market helping to support values
2021 has highest number of sales over £750k of last seven years
Includes breakdown of 27 local authorities
Alan Penman, Business Development Manager at Walker Fraser Steele, comments:
“The average house price in Scotland at the end of July stands at £207,877, a new record level, having risen by some £5,950, or 2.9%, in the month. This is the largest increase in a month since March 2015 – just prior to the introduction of the Land and Buildings Transaction Tax in Scotland the following month.
“The average house price has increased by some £20,550 – or 11.0% – over the last twelve months. This is 2.5% higher than the 8.5% recorded one month earlier. The annual rate had been slowing over the previous three months from a high in March 2021 of 11.4%. But it is the continuing strong performance of larger properties that is supporting the current growth.
“Sales volumes, which now appear to be running at the levels seen in 2018, also suggest larger properties are supporting higher average prices. Lower transactions and strong prices at the top-end show that demand is exceeding supply with the focus of the market on higher value transactions supported by continuing record low interest rates.
“Combined with the previous tax savings associated with the LBTT holiday, these factors have encouraged the whole market to focus on larger properties and give cause to believe the exceptional performance of larger properties might continue for some months to come.”
Commentary: John Tindale, Acadata Senior Housing Analyst
The July housing market:
Scotland’s average house price at the end of July stands at £207,877, which sets a new record level, having risen by some £5,950, or 2.9%, in the month. This is the largest increase in a month since March 2015, which was just prior to the introduction of the LBTT in Scotland in April 2015.
One of the main reasons for the current upward movement in prices is a result of the lifestyle changes associated with “working from home”, which has brought about a shift in housing preferences to larger properties – with space for home working – rather than commuting to-and-from one’s place of work.
The demand for larger premises continues to be strong, and for some includes moving to Scotland from London, or from other major cities in the UK and beyond. However, the supply of larger homes in Scotland remains thin, with strong competition for those properties that do come onto the market.
Last month we noted that the ending of the LBTT tax holiday in March 2021 made little difference to the high-value end of the housing market, with the number of purchases of £750k plus homes in June 2021 actually exceeding those of March 2021 (see Page 5). We suggested that this was probably due to the level of tax saving being limited to £2,100 in Scotland (compared to a saving of £15,000 in England), which is a relatively small sum in relation to a property costing £750k.
The tax holiday was therefore more likely to influence buyer behaviour at lower price levels, with purchases at £250,000 qualifying for the maximum tax savings. With the number of lower-priced sales falling in July, due to the purchase of such homes having been brought forward into the earlier months of the year, this will have had the effect of raising the average price of the properties that were purchased in the month.
Looking at Figure 1 below – which tracks the average house price in Scotland – we can see that prices reached a mini-peak in March 2021, immediately prior to the ending of the LBTT tax holiday on 1 April 2021. Average prices then started to fall, as buyers of high-value properties reduced in number (see Table 2). However, the reduction in high-value sales only continued through April and May, with June and July seeing a return of the higher-value purchases. This was perhaps assisted by those who had decided to move away from buying properties in England, where the threshold on tax savings had reduced to £250,000 at the end of June.
Transactions analysis
Monthly transaction counts
Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to July 2021, based on RoS (Registers of Scotland) figures for the Date of Entry (Applications Date for July 2021). The fall in the number of transactions for the period March 2020 to August 2020 is clearly visible. However, what is also clearly demonstrated is that the number of sales for each month from September 2020 to March 2021 has surpassed that of the same month in the previous six years.
In addition, the spike in sales that took place in March 2021 – as the tax holiday expiry date approached – is plain, although this total was exceeded by the volume of sales in October and November 2020, when monthly sales during the pandemic reached their peak. Also clear is the fall in sales in April 2021 to levels below those in all previous years except for 2016 and 2020, indicating the extent to which buyers had managed to bring forward their purchases into March 2021 to take advantage of the tax holiday.
For the record, the peak in sales in March 2016 was also tax-related, and came one month ahead of the introduction of the then 3% LBTT surcharge (now 4%) on second homes and buy-to-let properties, which tax was pre-announced to commence from April 2016.
Sales volumes for the period from April 2021 to June 2021 no longer exceed those of previous years, and appear to be roughly on a par with the levels seen in 2018. We will await the “Date of Entry” data for July 2021 before making a comment on this latest month.
Comparing total sales in 2020 with those of 2019, there was a 14% fall in the overall size of the market. However, looking at the number of transactions for the first six months of 2021 and comparing with the same period in 2019 (2020 figures are distorted by the lockdown in the early stages of the pandemic), sales are up by 11%, although this does include the spike in March 2021, which will have enhanced the 2021 figures.
Scotland transactions of £750k or higher
Table 2 shows the number of transactions per month in Scotland which are equal to or greater than £750k. The threshold of £750k has been selected as it is the breakpoint at which the highest rate of LBTT becomes payable.
Table 2 shows that there have been 537 sales in excess of £750k during the first seven months of 2021. This total is greater than the first seven months of each of the previous six years, beating the 363 transactions seen in 2015 – which had the second highest total to the end of July – by some 174 sales. Clearly the expectation for the whole twelve months of 2021 is that high-value sales will be far in excess of all previous years.
The reasons for this dramatic increase in top-end sales in 2021 are, as previously discussed, partly to do with the change in preference for larger properties. But additionally we should mention the record low interest rates, which make the purchase of a top-end property more affordable, as well as the tax savings associated with the LBTT holiday, which encouraged the whole market to be more adventurous in its outlook.
There are perhaps two other features of interest that can be observed in Table 2. The first, also previously mentioned, is that sales of high-value properties in June 2021 exceeded those of March 2021, despite the earlier month having the advantage of the tax holiday. The second is that in every month in 2021 (except March) the number of high-value sales has exceeded those of the same month in the previous six years.
Perhaps while discussing high value homes we should also point out that one tends to get more “bang for one’s buck” in Scotland than in England. For example, the recent purchase of a £1 million home in the Scottish Borders included 5 bedrooms, 2.8 acres of garden grounds and 5 acres of grazing paddock. In London £1 million will, in some boroughs, enable you to purchase a three bedroomed Victorian terrace, with minimal garden space. It is therefore little wonder that some Londoners are looking to move to Scotland, if the workplace allows.
Local Authority Analysis
Annual change
The average house price in Scotland has increased by some £20,550 – or 11.0% – over the last twelve months, to the end of July. This is 2.5% higher than the 8.5% recorded one month earlier, and comes as something of a surprise, given that the annual rate had been slowing over the previous three months from a high in March 2021 of 11.4%. We had assumed that since the ending of the LBTT holiday in March 2021 prices would begin to fall gently, but it would appear that the shift in housing preferences for larger properties – with space for home working – rather than commuting to places of work, continues to affect the current housing market.
In July 2021, all bar one of the 32 local authorities in Scotland have seen their average prices rise over the previous twelve months – the one authority not to have done so being Na h-Eileanan Siar, where only 25 sales took place in July 2020. The Scottish government were discouraging house buyers from visiting the Islands during the early stages of the pandemic – so average prices on the Islands were subject to dramatic change, due to the low numbers of transactions involved.
On the mainland, the highest annual July increase in prices occurred in the Scottish Borders, up by 23.2%. In the Scottish Borders, all property types have seen prices rise over the last year, with the largest increase being in detached homes, up from an average £285k in July 2020 to £370k one year later. The rise in average prices in July 2021 has been helped by the sale of six properties in excess of £750k, compared to 11 such properties being sold during the whole of 2020.
Monthly change
In July 2021, Scotland’s average house price rose by some £5,950, or 2.9%, and now stands at £207,877. This rise is the largest gain in a single month since the £15,316 increase seen in March 2015, immediately prior to the introduction of the Land and Buildings Transaction Tax (LBTT), which came into force in Scotland on 1 April 2015.
Prices rose in July 2021 in 28 of the 32 Local Authority areas in Scotland, indicating a near universal increase in prices across the country. The largest increase in July, of 9.9%, was seen in the Orkney Islands – but this was a reflection of the small number of transactions that took place on the Islands, with low sales volumes (32 in July) often being associated with high percentage changes in average prices.
On a weight-adjusted basis, which takes into account both the increase in average price and the number of transactions involved, 5 local authority areas in July were responsible for 52% of the positive movement in Scotland’s average house price. The five areas concerned, in order of influence, were Glasgow City, the City of Edinburgh, North Lanarkshire, East Lothian and South Lanarkshire.
Some analysts have been suggesting that, in the pandemic, it is isolated rural areas that have benefitted most from the lifestyle changes associated with the move to “work from home”. However, looking at the five authorities identified as having the most influence on the price change in July, one would not necessarily draw this conclusion. It would appear that the two largest cities in Scotland are responsible for the movement of over half the change in average house prices, either in their own right, or through their influence over their major commuting hinterlands.
Meanwhile, the Highland local authority area, which one might assume is mostly rural by disposition and should therefore be attracting new residents, has seen its average house price fall by -0.5% in July. As we reported last month, all property types in the Highland area have seen prices fall, with the price of terraces dropping from £155k in June to £134k in July. There has also been a decline in the number of detached properties sold in the month. For example, in the Highland area in March 2021 there were 171 detached properties sold in the month, contrasting with 84 detached homes being sold there in July.
Peak Prices
Each month, in Table 3 above, we highlight in light blue the local authority areas which have reached a new record in their average house prices. In July there are 12 such authorities, up from 4 local authorities in June, as well as Scotland’s own average price, which has also reached a new record level.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending July 2021. All bar one of the 32 local authority areas are reporting an increase in their housing values over the last year, the exception being Na h-Eileanan Siar.
One in eight adult children who live with their parents could spend half their life living with mum and dad
One in eight (13%) adults that have always lived with their parents are aged 35-55+. That means people are spending almost half of their expected lifespans (81 years) if not longer living with their parents
Of those aged 35+ that live with their parents, 40% have never moved out
Over a third (37%) of adult children living at home don’t expect to move out in the near future
This could be costing parents a fortune – over half (55%) of parents with adult children living at home said they cover additional costs because of this. On average parents are spending £117 per child each month
It’s well documented that more grown-up children are now choosing to live at home with their parents for longer4. Now, new research from SpareRoom reveals just how much longer that could be: almost half of their lives – if not more.
One in eight (13%) of those who have always lived with their parents are aged 35 to 55+. Currently the average life expectancy in the UK is 81 years. That means people in their mid-to-late thirties have lived with their parents for nearly half of their expected lifespans – while those over 55 have spent more than two thirds (68%) of their lives under their parents rooves.
Furthermore, of all of those surveyed aged 35 – 55+, 40% have never moved out of the family home5.
Astonishingly, one in two (50%) adult children who currently live at home have never moved out. What’s more, 37% don’t expect to move out within the next six months, with the likelihood of moving out decreasing after the age of 25.
Whilst living at home and spending time with family is seen (by most) as a positive bonding experience, it has an impact on important milestones outside of the family home for children, not to mention the cost implications for parents.
The majority (55%) of parents with adult children living at home cover extra expenses because of this, with the average parent being out of pocket by £117 per child each month.
The bank of mum and dad, now also known as the hotel of mum and dad, helps pay for their adult children’s food (64%), clothes (36%), fuel (25%) and even ‘pocket money’ for them to socialise with their friends (25%) while they’re living at home.
Many parents also paid for their subscriptions (20%) and holidays (23%). Covering mental health and therapy (12%) costs were also on the list of expenditures for parents.
Miriam Tierney, SpareRoom spokesperson comments: “We’ve known for some time that the number of adults living at home with their parents has been rising. The main factor driving that is how expensive housing is, regardless of whether you’re renting or buying. What hasn’t been clear, until now, is just how much of their lives people could be spending in the family home.
“There are, of course, plenty of positives to multi-generational living and in many countries and cultures it’s the norm. However, in the UK the trend is clearly being driven by the housing crisis rather than choice and it’s restricting career and social opportunities for a whole generation.”
Port of Leith Housing Association (PoLHA) and its subsidiary Persevere Developments Ltd (PDL) are marking Scottish Housing Day 2021 today by celebrating the opening of 104 affordable homes on Edinburgh’s waterfront.
The properties at Heron Place, Heron View, Heron Lane and Hesperus Crossway are situated at Granton Harbour and make up a stretch of the city’s large-scale waterfront regeneration programme.
The development has been designed with existing and new communities in mind and has a sunlit central courtyard which residents will be able to enjoy together. In total there are 46 homes for social rent, including two wheelchair accessible flats, and 58 homes for mid market rent.
The completion of this development brings the number of affordable homes provided by PoLHA in north Edinburgh to over 3,000.
Heather Kiteley, Group Chief Executive said: “It was a pleasure to visit our new development on Granton’s waterfront and to meet some of its new residents this Scottish Housing Day.
“The location is close to various paths and networks that interconnect north Edinburgh’s greenspaces. I am sure the community here will enjoy making the most of the city’s coastline and all the sustainable transport options it offers.
“That Scottish Housing Day is focusing on housing and the climate emergency this year is of personal importance to me. This new development has the lowest Environmental Impact Rating, good insulation, and is fitted with air quality monitors throughout.
“We as an industry have a long way to go to reach net-zero, and I am committed to working closely with colleagues on even more ambitious solutions to the climate challenges we face in the months and years to come.”
CCG Managing Director, David Wylie, said:“The Granton Waterfront Regeneration is one of the most significant of its kind in Scotland with housing being a key part of the City’s vision for its transformation.
“CCG’s journey at the waterfront began at Heron Place and works continue to be progressed with Port of Leith HA on a further 304 homes on an adjacent development.
“It’s an exciting time for the area and the wider housebuilding programme in Edinburgh and we are delighted to be playing our part as we embark on a further 600+ homes which are set to commence in 2022.”
Cezary Grabski, 27, works in Customer Operations for Standard Life. Originally from Poland, he is moving from elsewhere in the Granton area, and says: “I feel very lucky to have found this housing association and this beautiful development.
“The flats are brand new, finished to a very high standard, in a great location and with stunning views of the water and Edinburgh Marina.”
Sarah Watson, 25, a Clerical Officer working with NHS Lothian, is moving to one of the new mid market properties from the Saughton area of the city. Sarah said: “I immediately fell in love with the area and the picture of the flats were to die for!
“I can’t fault anything in regard to the process of applying for a mid market property and would highly recommend anyone to have a look at some for yourself. I can’t wait to move in and make my new flat a home.”
John Donald, 47, is an Accounts Assessor for the Scottish Legal Aid Board. He is moving from Great Junction Street in Leith and says: “I am delighted to have found this mid market rental property in such a great location. I have lived in private rentals since moving to Edinburgh 16 years ago.
“With my youngest heading to university this year I had been thinking I would probably have to move out of the city to find something more affordable. Thankfully I saw the mid market flats available in this development and I am now excited to be moving into a brand new home in a great and developing part of Edinburgh.”
Port of Leith Housing Association has ambitious plans to deliver more than 600 high-quality, affordable homes by 2025.
You can read more about this in its strategic plan polha.co.uk/2025.
