Multimillion pound loan scheme for social landlords relaunches
Social landlords will be able to access loans to build more affordable housing as a multimillion pound investment programme reopens to applications.
Under the Charitable Bond programme, registered housing associations can access the loans with up to £80 million available in the current financial year. The interest paid will be reinvested as grants into the social rented sector, further boosting the supply of affordable housing.
Since 2014, more than £260 million in loans have been made to housing associations across every corner of Scotland through the programme, generating almost £50 million in grants.
Housing Secretary Shona Robison said: “The Charitable Bond programme is an innovative way to offer funding to social landlords so that they can deliver as many homes as possible.
“The programme gives social landlords access to funding that they can’t receive elsewhere, and reinvests the interest paid on the loans – further increasing housing supply.
“Scotland has led the way in the delivery of affordable housing across the UK with almost 113,000 affordable homes built since 2007. This investment will help towards our current target of delivering 110,000 affordable homes by 2032.”
The Charitable Bond programme is delivered on behalf of the Scottish Government by Allia C&C, a social enterprise finance firm that arranges funding for housing associations and other charities.
Peter Freer, Director for Scotland at Allia C&C, said: “This programme provides a form of unsecured finance that isn’t otherwise available in the market to enable Scottish housing associations to deliver much needed affordable homes.
“We’re delighted to continue our successful eight-year partnership with the Scottish Government with an even greater target for investment across the sector over the next four years.”
Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “As the principal drivers underpinning much of the house price growth in the Scottish house market over the last couple of years (the pandemic, record low interest rates and the fiscal stimulus of the Stamp Duty holiday) become a distant memory, it’s no surprise that the housing market reflects this.
“This is not only happening here in Scotland but is reflected across the broader UK housing market.
“The average price paid for a house in Scotland in September 2022 was £223,604 which represents a reduction of £485, or -0.2%, from the price seen in August. It is the second fall in a row for Scotland’s monthly average house price, but this follows 13 months of successive gains.
“If we take stock for a minute of the longer-term performance, we can see that while the average price has fallen in the month, it remains some £13,300, or 6.3%, higher on an annual basis than it was twelve months earlier.
“Clearly, we should not be surprised if this annual rate of price growth slows for the reasons I have outlined. But things to keep an eye on include the budget this week, the expectation that inflation is easing, and that mortgage rates and affordability will improve in the first quarter of next year, and the lack of supply that has always supported higher prices. These may all mean this reduction in house prices is less short-lived than many suspect.”
Commentary: John Tindale, Acadata Senior Housing Analyst
The September housing market
The average price paid for a house in Scotland in September 2022 was £223,604. This represents a fall of £485, or -0.2, from the price seen in August, and is the second fall in a row for Scotland’s monthly average house price, following 13 months of successive gains.
Despite the average price having fallen in the month, the price is still some £13,300, or 6.3%, higher on an annual basis than it was twelve months earlier. However, the annual rate of price growth is slowing – having nearly halved over the last three months – from the 10.4% growth in June, to September’s rate of 6.3%.
Figure 1 below gives a sense of the direction of travel in the annual price growth over the past two years. As can be seen, the peak in growth rates occurred in September 2021 at 12.8%.
This was then followed by a period of slowing rates, which had fallen to 6.4% by March 2022, but regained traction during the early summer months of 2022 as demand for homes increased, against a backdrop of a reduced supply of properties coming to the market, with annual rates reaching a high of 10.4% in June 2022.
The slowing in rates after the June peak can then be seen, to September’s figure of 6.3% – the lowest rate since the 5.9% of November 2020.
The RICS Residential Market Survey for September suggests that the home sales market continued to lose momentum amid deteriorating macro conditions, with indicators on new instructions and agreed sales remaining negative.
As we discuss in the analysis of transactions on page 4, there is some evidence that the number of sales taking place in Scotland is currently below that of the pre-Covid years, but at present the reduction is relatively slight, at -6%. In addition, the reduction does not appear to apply to all sectors of the market at the same rate.
Sales of high-value properties in the first nine months of 2022 are at a record high, with few indications that the pace of such sales is diminishing. Edinburgh continues to dominate the high-end market, with half of all sales over £750k taking place in the capital. Edinburgh and the three Lothians have all set new record average house prices in September.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2007 to September 2022, based on RoS (Registers of Scotland) figures for the Date of Entry (September 2022 totals are based on RoS Application dates).
The graph starts in 2007, which was something of an exception, with close to 150,000 domestic property sales taking place in the calendar year. The 2007 sales total is the largest seen during the last 18 years, although the period from 2004 to 2006 came close, with an average 139,000 sales on an annual basis.
However, during 2008 the banking industry began to suffer from its credit crisis, with home loans becoming difficult to obtain, especially for first time buyers, with the number of housing transactions falling to approximately 70,000 per year over the period from 2009 to 2012.
Normality was slowly restored from 2013, with sales rising to a yearly average of 87,500 over the period from 2013 to 2015, rising to an average 102,000 sales per annum from 2016 to 2019. This level was still some 25% below the levels seen during the period 2004 to 2006 – it was generally believed there had been a shift in the housing market, away from owner occupation to rental premises.
The effect of the Covid pandemic – which started in March 2020 – can be clearly seen on the graph. Housing transactions in April 2020 plummeted with the arrival of the pandemic, to be followed by a slow rise in sales as confidence began to return.
Then followed a period when sales exceeded previous levels, from September 2020, as lifestyle changes and the LBTT tax-holiday pushed up demand – especially for properties with space to allow for working from home.
The March 2021 peak is also visible, which coincided with the last month of the LBTT tax-holiday. The final month typically creates a peak in transactions, as purchasers rush to take advantage of the tax- holiday before the end of the month, after which time the tax savings come to an abrupt halt.
However, what can also be seen is that in 2022 sales volumes appear to be at the lower end of the period from 2016 to 2019; for example the average level in 2022 from March to August was 8,700 sales per month, compared to 9,250 per month in 2017 – a 6% reduction in sales.
Figure 2. The number of sales per month recorded by RoS based on entry date (RoS applications date for September 2022), for the period 2007 – 2022. (Source: Registers of Scotland.)
£6 million loan fund reopens for applications tomorrow
Self-builders who are unable to access standard bank lending can now apply for a loan of up to £175,000 to help with the development costs of their home.
The Self-Build Loan Fund reopens for applications tomorrow (Monday 21 November) and aims to support the delivery of good quality and energy efficient housing, giving people more choice about the homes they want to live in.
Following the success of a pilot scheme in the Highlands the fund was launched nationally in 2018, with 41 loans worth a total of £6.2 million approved to date.
Housing Secretary Shona Robison said: ““This fund aims to unlock the dream of building your own home, in many cases allowing people to stay in their local communities.
“We know it can be more difficult to access finance for self-build projects than for buying an existing property, and this fund is a crucial lifeline for those unable to access standard bank lending. When loans are repaid, the money can be re-used, during the life of the fund, supporting more self-builders and providing more homes for future generations.
“Self-provided housing can play an important role contributing to the long-term sustainability of our rural and island communities, and this £6 million Scottish Government fund will continue to help support this. It has had great success in the Highlands and Islands and has also provided dream homes for people living across the whole of Scotland.
“Wherever you live, if you’re interested in building your own home I’d encourage you to contact the Communities Housing Trust to find out more.”
Kirsten, a school teacher from Shetland who benefitted from the fund, said: “We acquired our plot of land over 20 years ago. At that point there was an old croft house on the land which we initially planned to renovate.
“However, several things arose to hinder our plans. The most significant was my partner becoming long-term disabled after an accident. This meant a lot of disruption to our build plans.
“If the fund hadn’t been available we would have had to stop our build altogether and sell the plot of land. That would have meant it being harder for us to get onto the property ladder.
“It can be difficult or more costly to find a property that has larger living accommodation needed for wheelchair use. It may also have taken us away from our home area where family are nearby. I don’t know what we would have done without this fund.”
Ronnie MacRae, CEO of the Communities Housing Trust, said: “In the years we’ve administered the fund, we’ve seen demand rise as conditions become even more challenging for people to build their own home. In many cases, families just need a bit of extra support and are fully able to build and then repay the loan.
“Self-build remains an important option for many, particularly in areas where no other options exist, so we are extremely grateful to the Scottish Government for continuing to provide the fund.”
The fund is reopening after closing on 31 August 2022 to new applications.
The Self-Build Loan Fund is administered on behalf of the Scottish Government by the Communities Housing Trust.
Property developer S Harrison Developments have revealed ‘exciting proposals’ for a residential-led development at Ocean Point 2 in Leith.
Neighbouring Ocean Point 1, whose occupiers include VisitScotland, the brownfield site will aim to comprise a mix of residential homes for rent alongside other potential uses, which are currently being ascertained. These will occupy two buildings on the site.
Located in Leith, voted in October 2021 by Time Out as one of the “world’s coolest neighbourhoods”, the proposed development is conveniently situated just two miles from Edinburgh city centre and is likely to be attractive to those seeking to live and work in the area, taking advantage of local shops, bars, restaurants and cafés.
The tram line extension between Edinburgh and Ocean Terminal will also provide connectivity between the development and the city centre within 20 minutes.
Two public exhibitions on the proposals will take place on Tuesday 13th December and Thursday 9th February between 2pm and 7pm at Ocean Terminal.
Further information will also be posted on the website at:
Harrison has a long pedigree of working in the city, ranging from delivering the Malmaison at St Andrew Square to student developments at Westfield and Gorgie and hotel development at Osborne House, Haymarket.
A spokesperson for Harrison Developments commented: “We are extremely excited to reveal our proposals for this brownfield site. There are serious demands on housing supply in the city and this is a superb location in what has been voted one of the world’s ‘coolest neighbourhoods’.
“The proposals will significantly assist in the regeneration of this part of the city and we look forward to engaging with the local community, providing it with the opportunity to input their views and shape our ambitious proposals.”
New to market are eight cleared residential development sites in Western Harbour and Granton Harbour on Edinburgh’s waterfront.
The opportunity forms five sites at Western Harbour and three sites at Granton. The sites are considered highly strategic due to the potential for scaled residential development at a time when Edinburgh desperately requires more housing choice.
Western Harbour
The five waterfront residential development sites at Western Harbour total approximately 10.21 acres and are adjacent to the proposed Forth Ports masterplan.
Western Harbour boasts a range of local amenities including a David Lloyd gym, supermarkets, recreational facilities and a new primary school. The sites also neighbour vibrant Leith, voted in October 2021 by Time Out as one of the world’s coolest neighbourhoods following extensive regeneration.
The sites are also well-connected by bus and are set to be even more so given the Newhaven Tram extension. The tram will terminate at nearby Newhaven Village (due to complete in Spring 2023) and it will offer access to Edinburgh city centre with a travel time of approximately 30 minutes, through to Edinburgh Airport via Edinburgh’s West End.
With the potential for c. 600 units, subject to planning, the sites are identified for housing-led-development within the Western Harbour Masterplan. The Western Harbour Masterplan is a housing led mixed-use development anticipated to comprise c. 3,000 residential units with retail and commercial space over 120 acres.
Granton Harbour
There are a further 3 sites at Granton Harbour (which forms part of the wider Granton Waterfront Development). The Granton project is located just three miles north of the city centre and the largest regeneration project of its kind in Scotland and recognised as one of the most exciting in Europe.
The three development sites on offer at Granton Harbour total approximately 3.94 acres and provide an opportunity to create a scaled residential or mixed-tenure development. They also neighbour the proposed Edinburgh Marina Development, which comprises a 429-boat marina, serviced apartments, new housing, commercial and retirement living complexes.
There are also proposals for a future tram extension running along the Granton Waterfront, forming part of a new Granton circular route.
The sites are allocated for housing development under the approved Granton Harbour Masterplan. The overall Granton Waterfront Development provides over 60 acres of newly developed and regenerated land, supported with an investment of over £1.3 billion.
Joint sales agents for the development sites are Scarlett Land and Development and Reith Lambert.
Will Scarlett from Scarlett Land and Development said: “We are incredibly excited to be bringing these eight well recognised sites to market.
“The portfolio provides a rare opportunity in Edinburgh to deliver large scale residential development across multiple tenures and we anticipate strong interest noting this potential.“
Drew Lambert from Reith Lambert said: “Large-scale prime residential sites such as this are a rarity in Edinburgh; these sites are ideally placed, with an excellent range of amenities and well-connected transport links on offer.”
The Scottish Government’s decision to reduce by 4,500 homes the number of houses to be developed in Edinburgh has been questioned by Sarah Boyack, Scottish Labour MSP for Lothian following the Ministerial Statement on National Planning Framework 4.
Ms. Boyack asked the Planning Minister, Tom Arthur, to explain why the number of houses to be developed in Edinburgh has been reduced by 4,500 homes at a time when the city is facing a long-standing deepening crisis.
The MSP for Lothian raised also issues around the capacity of GPs to cope with rising demand and asked about whether new GP and local health services will be included in planning application for the new housing being proposed across the Lothian given the challenges the region is already facing in terms of GP capacity in areas where significant new development is being planned.
The National Planning Framework (NPF) is a long-term plan for Scotland that sets out where development and infrastructure is needed.
Scotland’s fourth National Planning Framework (NPF4) will guide national and regional spatial development and set out priorities and national planning policies up until 2045.
Commenting, Sarah Boyack MSP said: “A housing crisis affecting those on low or modest incomes, students and families looking for long term housing is unfolding not only in Edinburgh but across Scotland. The available properties are unaffordable or inaccessible for many and affordable, high-quality properties are almost non-existent.
“Reducing the number of new housing developments in Edinburgh will be catastrophic for people, the city and our local economy.
“The SNP claim they want to build a new Scotland – but they are going into reverse.
“In Musselburgh, people are struggling to access vital GP services – with rising local population and housing developments, this is rapidly becoming a pattern we see across Scotland.
“Planning applications should be considering issues around GPs’ capacity – we can’t gamble with people’s lives.
“The Minister dodged my question, offering nothing more than empty rhetoric.”
The City of Edinburgh Council is encouraging its housing tenants to take part in a housing rent consultation. This annual consultation helps influence how the Council spends the money it raises from rental income.
The cost-of-living crisis is also impacting on our costs to run housing services. It is now more expensive to ensure our Council homes meet statutory energy efficiency standards and to build new affordable homes.
Over the next eight weeks we’re seeking tenants’ views on their priorities on how we spend the rent money we collect, what their views are on rent increases, and the financial challenges they face.
We recognise that this year will be particularly challenging for all residents with rising inflation, spiralling prices, and the wider cost-of-living crisis.
However, costs of providing landlord and housing services are increasing, and tenants previously told us they want us to invest in homes to make them more energy efficient and that they need more affordable homes. We have frozen rents for two years, now we need to know what tenants think about what we do next year.
The Scottish Government has recently announced that council rents will remain frozen across Scotland until at least March 2023. At this stage it is unclear whether this will be extended beyond the spring.
Depending on the outcome of this we will consider options for a rent increase in 2023-24. However, any change in rents must take into consideration tenant’s views and input.
We would use any increase in rent to invest in homes to make them more energy efficient and help tenants save money, as well as improving the landlord service that we provide.
We are looking forward to hearing from our tenants on housing and how the Council can further support them through the cost-of-living crisis.
Councillor Jane Meagher, Housing, Homelessness and Fair Work Convener, said: “Tenants and their views are at the heart of our housing priorities and goals. With the current cost-of living-crisis and rising economic uncertainty, it is more important than ever that our tenants have a say in how the Council goes forward with housing.
“I hope that this year’s consultation will allow the Council an informative and insightful view into how tenants would like rental income spent.
“We want to make sure rents are affordable for tenants whilst also being able to sustainably invest in the standard and quality of council homes for the future.
“I would urge all council tenants to participate in the consultation and make their voices heard.”
Emergency legislation giving tenants increased protection from rent increases and evictions during the cost of living crisis has become law after receiving Royal Assent.
The Cost of Living (Tenant Protection) Act gives Ministers temporary power to cap rent increases for private and social tenants, as well as for student accommodation.
This applies to in-tenancy rent increases, with the cap set at 0% from 6 September 2022 until at least 31 March 2023, effectively freezing rents for most tenants during this period.
Enforcement of eviction actions resulting from the cost crisis are prevented over the same period except in a number of specified circumstances, and damages for unlawful evictions have been increased to a maximum of 36 months’ worth of rent.
Tenants’ Rights Minister Patrick Harvie said: “Many people who rent their homes are facing real difficulties as a result of the cost of living crisis. While bills are rising for all of us, many tenants are more exposed as they are more likely to be on low incomes or living in poverty than other people.
“These measures aim to give tenants greater confidence about their housing costs and the security of a stable home.
“Some landlords may be feeling the effects of this crisis too. So while the primary purpose is to protect tenants, the emergency measures also include safeguards for those landlords who may be impacted.
“For anyone struggling with their rent, I would urge you to contact your landlord, an advice organisation or a tenants’ union to get help as early as possible.”
Edinburgh Lettings Agent Clan Gordon has been looking at what this means for the landlords and tenants that they represent.
Clan Gordon Managing Director, Jonathan Gordon, was part of the Scottish Government’s working Group which consulted on and helped them develop the Private Residential Tenancy (PRT) regime in 2017 which transformed the sector, introducing far greater protection for tenants and simpler procedures for landlords.
He said: “It is reassuring to hear Ministers say the new Cost of Living (Tenant Protection) Bill balances the protections that tenants need, with safeguards for those landlords who may also be impacted by the financial crisis.
“Under the new law, rents for existing private and social housing tenants cannot be increased until at least the end of March 2023 and can be extended for up to a further 12 months in two six-month blocks.”
So, what does this mean for landlords? Although the rent cap can continue at the current 0% rate or can be varied at ministers’ discretion, there is no cap or limit on increasing the rent when advertising for new tenants.
Jonathan continued, “Despite the media attention when this was announced this is not a ban on landlords ending tenancies. Landlords can still serve notice as normal if they wish to end a tenancy.
“Most tenants leave during the notice period when they find alternative accommodation so this restriction will have little effect here. If the tenant doesn’t leave during the notice period, the landlord can apply to the tribunal for an eviction order as normal.
“However, the legislation delays a landlord from enforcing an eviction order issued by the tribunal in some circumstances for up to six months.
“Tenants can still be evicted for anti-social behaviour, lender reposition, abandonment, substantial rent arrears or if the landlords intend to sell or move back in to the property to alleviate financial hardship.
“We are also very pleased to see that as well as considering the tenants in this legislation, there are new safeguards for private landlords who find themselves impacted by the cost-of-living crisis.
“In certain circumstances, Landlords will be able to apply to Rent Service Scotland to increase the rent on a property to cover up to 50% of a limited number of specific costs, including increased mortgage interest payments and increases in landlords insurance or service charges.
“Interestingly the rent cap also applies to university halls of residence and other student accommodation where energy costs may be included in rent payments.
“There has been widespread concerns about increases to fuel prices, but the legislation prevents landlords passing on gas and electricity cost rises, in increased rents within the next six months unless the landlord can prove excessively high use of any utilities.
“Students are also covered by the same eviction laws and can only be evicted in cases of anti-social or criminal behaviour.
“Our approach has always been to encourage landlords to help us support any tenant who faces any difficulties including financial ones and in conjunction with our landlords we worked to support a lot of tenants financially and otherwise during the Covid pandemic and lockdowns.
“This is going to be a difficult road ahead and we are pleased that the government has put some measures in place to support and protect landlords and tenants.
The government advice website www.costofliving.campaign.gov.scot offers helpful tips, advice and guidance and our team will be very happy to offer advice about the new legislation to those affected by the current cost of living crisis.”
August House Price Index from Walker Fraser Steele:
Scotland’s average house price decreased in August by £225
But 31 Local Authorities have seen prices rise over the year
Shetland Islands have highest annual growth rate at 19.6%
Larger number of high-value sales in 2022 than 2021
Average house price £224,117, down 0.1% on July, 7.6% up annually
Table 1. Average House Prices in Scotland for the period August 2021 – August 2022
Scott Jack, Regional Development Director at Walker Fraser Steele, comments:“The average price paid for a house in Scotland in August 2022 was £224,117 – a slight decrease of 0.1%, from the price established in July.
“It is only significant in so far that it is the first decrease in Scotland’s monthly average house price since June 2021, but it is important to remember that on an annual basis, the price is some £15,900, or 7.6%, higher than it was in August 2021.
“One reason for the continued resilience is the number of sales recorded over £750k. Our data shows that some 82 sales were recorded at values over £750k during August 2022. We think this figure will increase as further sales for the month are processed by the Registers of Scotland.
“What this number of sales over £750k tells us is that “working from home” and the “race for space” continue to be important features of the current housing market, even if the prominence of the Covid restrictions are beginning to wane.
“Properties of this nature command more space to accommodate new ways of living but remain in short supply which again supports the average house price – even in the face of some meaningful economic headwinds thanks to global inflationary pressures.
“How resilient prices are over the coming months remains to be seen. Certainly, some of the recent domestically inspired spikes to mortgage affordability may yet dampen buyer enthusiasm, but today’s interventions from the new Chancellor are designed to stabilise the cost of borrowing – and there remains a shortage of desirable property.”
Commentary: John Tindale, Acadata Senior Housing Analyst
The August housing market
The average price paid for a house in Scotland in August 2022 was £224,117. This represents a marginal fall of £224, or -0.1%, from the price established in July, the first fall in Scotland’s monthly average house price since June 2021.
Although the average price fell in the month, on an annual basis the price is some £15,900, or 7.6%, higher than it was in August 2021. This annual rate has slowed from the 10.6% growth seen in June, but that month was assisted by a near £3,000 fall in prices which occurred twelve months earlier in June 2021, meaning that the base point for measuring June’s growth rate had started from a particularly low level.
As Figure 1 below shows, since the start of this year the average house price growth in Scotland has been oscillating on a bi-monthly basis, so the fall in the August rate was not unexpected.
Figure 1. The monthly rate of house price growth in Scotland over the period August 2021 to August 2022
As shown in Table 2 sales of high-value properties in the first eight months of the year are at an all-time high, with no indications that the pace of such sales is diminishing. This would suggest that the post-Covid lifestyle changes associated with “working from home” and a “race for space” remain as motivation for would be home-movers, with competition for the right property continuing to keep prices high.
The commentary in this release relates to the August housing market in Scotland. This does of course pre-date the somewhat remarkable events of September and October, with a Mini-Budget having been delivered on 23rd September and a new Chancellor being installed on 13th October.
As noted in this release, the housing market has shown considerable resilience over recent months, in spite of predictions otherwise. Although interest rates have been edging up, it is clear there is still considerable buying power and appetite in the market. Our task will be to report on what happens to completion prices based on cash and mortgaged transactions across Scotland. There will be much on which to reflect.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to August 2022, based on RoS (Registers of Scotland) figures for the Date of Entry (August 2022 totals are based on RoS Application dates).
The effect of the Covid pandemic – which started in March 2020 – can be clearly seen from the graph. Housing transactions in April 2020 plummeted with the arrival of the pandemic, to be followed by a slow rise in sales as confidence began to return. Then followed a period when sales exceeded previous levels, from September 2020 to March 2021, as lifestyle changes and the LBTT tax-holiday pushed up demand – especially for properties with space to allow for working from home.
The March 2021 peak is also clearly visible, which coincided with the last month of the LBTT tax-holiday. The final month typically creates a peak in transactions, as purchasers rush to take advantage of the tax-holiday before the end of the month, after which time the tax savings come to an abrupt halt.
Sales from June 2021 onward also tended to be higher than during the previous five years (2015 – 2019), as demand for larger properties with space and potential holiday lets continued to stimulate the market. It is only from the start of 2022 that demand appears to have weakened marginally, with sales from March 2022 to July 2022 no longer exceeding those of the previous years, although Table 2 on the next page indicates that the demand for properties priced in excess of £750k continues to be strong.
In the graph below, the August 2022 total shows a small increase in transactions compared to July 2022, but the figure for the month remains an estimate, so at this stage not too much weight should be given to the predicted rise in sales.
RICS (Royal Institution of Chartered Surveyors), in its August 2022 Residential Market Survey, is continuing to point to an easing in sales market activity, with metrics on demand and sales remaining in negative territory over the month. RICS do however add that that the current level of market appraisals being undertaken is similar to that seen twelve months ago, suggesting the tight supply backdrop is unlikely to change dramatically in the near future – this remains consistent with a still reasonably solid degree of upward movement in house prices for the time being.
Figure 2. The number of sales per month recorded by RoS based on entry date (RoS applications date for August 2022), for the period 2015 – 2022. (Source: Registers of Scotland.)
Scotland transactions of £750k or higher
Table 2. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – August 2022
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 were 82 sales in excess of £750k during August 2022, and we anticipate that this total will increase by another twenty-plus in number, as further sales for the month are processed by the Registers of Scotland. If this proves to be the case, then six of the eight months in 2022 will have seen a higher number of sales in excess of £750k than in 2021, which was itself ahead of all previous years. Certainly, looking at the first eight months of 2021, for comparative purposes, there were 692 sales above £750k, which have been exceeded by the 710 sales seen in 2022.
These statistics suggest that the “lifestyle changes” associated with the pandemic, of “working from home” and the “race for space”, continue to be important features of the current housing market, even if the prominence of the Covid restrictions are beginning to wane.
The five authorities with the largest number of the 710 high-value sales that have been recorded to date in 2022 are: Edinburgh (360); Glasgow City (46); Fife (39); East Lothian (36); and finally East Renfrewshire (24). From these figures it can be seen that in 2022, Edinburgh accounts for just over half of this sector of the housing market.
Local Authority Analysis
Table 3. Average House Prices in Scotland, by local authority area, comparing August 2021, July and August 2022
Table 3 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for August 2021, as well as for July and August 2022, calculated on a seasonal- and mix-adjusted basis. The ranking in Table 3 is based on the local authority area’s average house price for August 2022. Local Authority areas shaded in blue experienced record average house prices in August 2022.
Annual change
The average house price in Scotland increased by some £15,900 – or 7.6% – over the last twelve months, to the end of August. This is a near £3,100 decrease over the £19,000 growth in prices seen in the twelve months to the end of July 2022 – and represents the second month in a row in which the increase in prices on an annual basis has slowed.
In August 2022, 31 of the 32 local authority areas in Scotland saw their average prices rise over the levels seen twelve months earlier, the same number as in July. The one area that saw values fall over the year was East Lothian, where prices have dropped by 1.9%. In East Lothian, it is the average price of detached properties that have fallen the most over the past year, from an average £520k in August 2021 to £490k in August 2022.
The area with the highest annual increase in average house prices in August 2022 was the Shetland Islands, where values have risen by 19.6% over the year. However, as regular readers of our reports will know, the Islands frequently have the largest movement in average house prices due to the small number of transactions that take place each month, with just 21 sales in August. On the mainland, the authority with the highest increase over the year was – for the fifth month in succession – Argyll and Bute, at 17.1%. Interestingly, in August, it was “Flats” that saw the largest increase in average prices in Argyll and Bute, assisted by the purchase of a ground floor conversion of a Victorian villa in Helensburgh for £560k.
On a weight-adjusted basis, which incorporates both the change in prices and the number of transactions involved, there are six local authority areas in August that accounted for 49% of the £15,900 increase in Scotland’s average house price over the year. The six areas in descending order of influence are: – Glasgow (11%); Edinburgh (11%); South Lanarkshire (10%); Highland (7%); Fife (5%); and West Lothian (5%).
Monthly change
In August 2022, Scotland’s average house price in the month fell by some £225, or -0.1%. This is the first fall in the average house price in a month since June 2021.
In August 2022, 20 of the 32 Local Authority areas in Scotland experienced rising prices in the month, the same number as in July. The largest increase in average prices in August was seen, for the second successive month, in Inverclyde, up by 7.0%. Last month we reported that prices in July in Inverclyde had been assisted by the purchase of an upmarket flat in Greenock. This was a lower-floor conversion of a traditional 5-bedrom 1870 Victorian blonde sandstone property, which sold for £370k. In August, it transpires that a further upper-floor conversion was sold in the same street for £410k, which helped secure Inverclyde’s position as having the highest increase in average prices in the month.
At the other end of the scale, the lowest increase in average prices in August was in Stirling, at -4.9%. The third-highest priced sale of the year in Stirling had been included in the statistics for last month – a detached home in Croftamie, a village located some 25 miles to the north of Glasgow, which sold for £1.4 million. But, having dropped out of the statistics this month and with no similar property taking its place, average prices in Stirling in August dropped accordingly.
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 7 such authorities, down from the 11 seen in July. With average prices in Scotland falling in August we should advise that Scotland itself is no longer at a record price, the first time this has happened this year.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending August 2022. As reported above, 31 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year, the one exception being East Lothian. The highest increase on the mainland over the twelve months to August 2022 was in Argyll and Bute at 17.1%. 14 of the 32 local authority areas had price growth in excess of 10.0% – two less than in July 2022.
Comparisons with Scotland
Figure 3. Scotland house prices, compared with England and Wales, Wales, North East and North West for the period January 2005-August 2022
Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, Wales, North East and North West for the period January 2005–August 2022
Scotland’s Eight Cities
Figure 5. Average house prices for Scotland’s eight cities from June 2021–August 2022
Figure 6. Average house prices for Scotland’s eight cities August 2022
Prospective buyers hoping to reserve a property at the popular Pennywell Living development in Edinburgh will need to move fast, as there is only a small collection of apartments left that are ready to call home.
The remaining apartments are available at the north Edinburgh development, which is delivered by regeneration specialists Urban Union, after the final batch of houses in Phase 3 sold out in 2 weeks.
Currently available is the ‘Adam’, a two-bedroom apartment perfect for those looking for their first home or looking to downsize. Starting from £191,995, this home features a bright open-plan kitchen and living area, perfect for entertaining friends. The main bedroom is spacious and comes complete with an en-suite. There is plenty of storage area including fitted wardrobes and a separate utility cupboard.
Also ideal for first-time buyers, the ‘Ross’ is a one-bedroom second floor apartment offering a large open plan living and kitchen space starting from £169,995. With contemporary specification and energy efficient living, the ‘Ross’ offers excellent storage space and is completed with a modern bathroom.
Located only a few miles from Edinburgh city centre, Pennywell Living is in a prime position to make the most of the many shops, bars and restaurants the capital has to offer. Also, with great local primary and secondary schools, and a wealth of useful amenities in the area, the development is perfect for young professionals and families alike.
Neil McKay Managing Director at Urban Union, said: “We are absolutely delighted with the past sales success at Pennywell. Given how popular properties have been at the development we really don’t expect these apartments to be around for long and we encourage potential buyers to come down to the development and get a feel for the properties in person as soon as possible.
“Prospective buyers will be amazed by the spacious apartments available which offer the home comforts and efficiencies you would expect from a brand-new home, and so much more.”
Every Urban Union home is highly energy efficient and is completed with all the features necessary for modern life, including high-quality, fully integrated kitchens and bathrooms, plenty of storage space and spacious living areas perfect for those looking for a place to call home.
Apartments at Pennywell Living are available to reserve now with just £99 reservation fee.
For further information visit the Urban Union website, call07940 992182 or email:
