Council leaders are failing children across the country when it comes to social housing according to Shelter Scotland.
Ahead of the local authority elections in May, the housing charity has said council leaders need to urgently step up in order to tackle the deepening housing emergency.
In Glasgow alone there are 2,480 children stuck in temporary accommodation, while 1,515 children in the capital face the same situation. In Aberdeen, a household with children spend 103 days in temporary accommodation on average, while in Dundee that figure rises to 285 days.
Shelter Scotland’s analysis of council’s housing plans* shows that a minimum of 7,000 social homes are needed over the next five years in Edinburgh, 3,675 in Glasgow, 853 in Aberdeen and 655 in Dundee.
Each of the local authorities in those cities failed to deliver on their previous affordable housing targets.
Director of Shelter Scotland, Alison Watson, said: “Right now, thousands of households, including thousands of children, are trapped in temporary accommodation. Often, they’re living in cramped conditions which are entirely unsuitable. Many of them have been living in so-called temporary accommodation for months or, in some cases, years.
“Living in temporary accommodation can have devastating effects. It disrupts children’s learning, it places huge strain on family life, it can ruin people’s health. In the face of a deepening cost-of-living crisis this problem is only going to get worse unless action is taken now.
“As more people are exposed to the risk of homelessness, only social housing can stem the tide. The Scottish Government has promised the cash for new social homes, we need to keep fighting to make sure they’re actually built.
“With the local elections just around the corner our cities’ leaders can’t shirk their responsibilities. We need them to step up and finally contribute to building a future where everyone in Scotland, without exception, has their right to housing upheld.
“The scale of the challenge is clear, but council leaders must rise to meet it. The thousands of children without the security and safety a permanent home provides can’t wait a second longer.”
Shelter Scotland has launched a new campaign asking people to demand that council leaders pledge to build social housing.
For more information and to sign the petition, visit:
It was always on the cards that if restrictions were to be introduced on short-term letting in Scotland, Edinburgh would be first out of the blocks. And, sure enough, the council last month introduced a city-wide “control zone”.
The capital, which for obvious reasons is the country’s tourist Mecca, has become a magnet for Airbnb-style short-term lets over the last decade, leading to concerns about housing shortages and perceptions about anti-social behaviour.
Under draft proposals which will now go to Scottish Government Ministers for final approval, property owners will soon need planning permission to be able to operate short-term lettings and will have to apply for a change of use certificate from the planning department.
What is less well known is that the council has always had the power to require planning permission in the event of a material change in environment, such as short-term rentals. The difference is that, from now on, this will be mandatory.
It should be noted that the proposals only apply to secondary lettings, i.e., properties which are not an owner’s primary residence. People will still be able to let out their homes while on holiday, or rooms in their home while they remain in residence.
However, while the new restrictions appear to be forging ahead, it still remains unclear what policies the local authority will eventually apply. The current Development Plan – the overarching guide to future council thinking – makes no mention whatsoever of short-term lets.
Nor, surprisingly, does the document designed to replace it, the City Plan 2030, which again does not concern itself with the issue – making it increasingly difficult for property owners to plan ahead.
One can only speculate at the moment about whether permissions will be granted for continued short-term use, and on what grounds. Nor is there any clarity about whether numerical limits will be imposed.
Were there to be limits, it would be reasonable to assume that applications would be allocated on a first-come, first-served basis, so landlords hoping to remain in the market might be advised to act sooner, rather than later.
There is, of course, an existing provision in law whereby if a short-term let has been operating for more than 10 years, with no action against it by the council and no action to conceal its operation, then it is entitled to a Certificate of Lawfulness to continue operation, though necessary evidence will be required.
As of the start of this month, there have been nine applications so far this year for planning permissions for short-term lets, only two of which have been granted – and they both involved Certificates of Lawfulness.
What to do if applications fail is clearly now a matter of immediate concern for property owners and DM Hall’s specialist rural arm Baird Lumsden is currently embarked on an information campaign around the sales, letting and management options which remain open.
It has gone into the issue in depth, in anticipation that Highland Council will be the next authority to impose short-term let restrictions around the Badenoch and Strathspey area, and is reaching out to concerned parties.
Informed and impartial advice of this nature is something of a port in a storm for property owners who are caught between a rock and a hard place as the restriction net tightens.
There has been anecdotal evidence of landlords exiting the short-term market and moving to longer lets in the private rental sector. But regulation in this sphere of activity is getting stricter all the time, and the imminent New Deal for Tenants will do nothing to ease landlord pain.
On a superficial level, it is easy to understand the council’s hope that properties taken out of short-term lets will find their way back into the housing stock, thus easing ongoing shortages.
But a counter-argument, articulated by bodies such as the Association of Scotland’s Self-Caterers, is that lack of house-building is as much of a contributory factor to shortages, and that short-term lets bring in huge volumes of valuable tourism revenue to the city.
As things are, some smaller operators may indeed be forced to sell up and quit the market, although larger letting concerns will almost certainly continue to jump through the necessary hoops.
In this volatile environment, expert professional advice is the only real safeguard, and prudent property owners and landlords will seek it out as timeously as possible.
Calum Allmond is Head of Architectural Services at DM Hall Chartered Surveyors.
For further information, contact DM Hall Chartered Surveyors, 27 Canmore Street, Dunfermline KY12 7NU. T: 01383 621262. E: dunfermline@dmhall.co.uk.
Rise in mortgage demand fuelled by appetite to buy homes with more space, and the Land and Buildings Transaction Tax (LBTT) holiday
There was a 22 per cent increase in first time buyer mortgages, and a 27 per cent increase in mortgages for people moving home in 2021 compared to 2020
The loan-to-income (LTI) ratio for all homebuyers hit its highest level in 2021
Demand for homes with more space during the pandemic helped drive a 24 per cent increase in new mortgages in Scotland in 2021. Figures from UK Finance show that there were 70,190 new mortgages approved during 2021, up from 56,450 in 2020.
The total overall new mortgage figure is made up of first-time buyer mortgages and homemover mortgages:
First-time buyer mortgages were up 22 per cent to 35,100 (2020: 28,740). This is also up from the pre-pandemic level of 32,630 in 2019.
Homemover mortgages were up 27 per cent to 35,090 (2020: 27,710). This is also up from the pre-pandemic level of 33,620 in 2019.
At the same time, the loan-to-income (LTI) ratio for homebuyers hit its highest level, reflecting the strong growth in house prices.
The LTI ratio is the number of times greater the amount a mortgage is compared to the total income of the borrower. For first-time buyers in Scotland this reached 3.24 in the final quarter of last year, while it was 2.97 for homemovers.
This is compared to an average LTI of 3.59 and 3.37 for first-time buyers and homemovers respectively across the whole of the UK.
Lee Hopley, Director of Economic Insight and Research, said: “Appetite to buy or move home was up last year with demand boosted from the LBTT holiday and changing housing needs from the pandemic.
“The increase last year follows suppressed activity in 2020 at the start of the pandemic, but it’s notable that homebuying numbers in 2021 also exceeded those in 2019.
“We expect to see a return to a more stable mortgage market this year with continued appetite to buy property; however, the pressure on real incomes from rising inflation is likely to bear down on effective demand.”
– Housebuilder supports 1,652 jobs, completes 732 new homes and 13.1ha of green space –
Barratt Developments Scotland, which includes Barratt Homes and David Wilson Homes, has made a substantial contribution of £256.3m to the Scottish economy, with the housebuilder’s East Scotland division supplying £106.9m in GVA itself.
In the year ending 30 June 2021, Barratt East Scotland has also completed 732 new homes of which 144 were affordable and supported 1,652 direct, indirect and induced jobs across the region.
2021 also saw the largest UK housebuilder reinforce its commitment to creating homes for nature as well as people. The business created 13.1ha of public green spaces and private gardens around the region, the equivalent of 19 football pitches, to help support wildlife on and around its sites.
Barratt is working towards reducing its direct carbon emissions by 29% by 2025 and indirect emissions by 24% per square metre by 2030. In the past year, CO2e emissions per 100m.sq. of completed build area fell to 2.25t. across the East Scotland business.
98% of construction waste was also saved from landfill and 26% of new homes were built on previously developed land, up 54% on the previous year.
Alison Condie, managing director for Barratt East Scotland, said:“As the UK’s largest housebuilder, and one of the most sustainable, we place considerable emphasis on supporting people, the environment and generating strong economic growth for the region.
“To have contributed over £106m to the economy and supported over 1,652 jobs is a fantastic achievement and we’re determined to do even better this year.”
As part of its housebuilding activity, Barratt East Scotland has made £5.4m in local contributions to help build new facilities and community infrastructure. This contribution includes the provision of 320 new school places.
More than £19.3m has also been spent on physical works within communities, such as highways, environmental improvements and community facilities.
Other key findings from the Barratt East Scotland 2021 socio-economic report include:
· Increased support for public services with £23.9m in generated tax revenues
· Over £36,400 donated to local charitable and community causes
· 284 supplier and 335 sub-contractor companies supported
· Increased support for the UK supply chain with 90% of all components centrally procured, assembled or manufactured in-country
· More than £10.7m in retail spending by new residents, helping support 114 retail and service-related jobs
The development of new and future talent remains a key priority for Barratt Developments Scotland and 53 graduates, apprentices and trainees launched their careers with the company in 2021, 15 from the East Scotland Division.
The assessment of Barratt Developments’ performance was carried out by independent consultants Lichfields, who analysed socio-economic impacts through the delivery chain for new housing based on Barratt datasets, published research and national statistics.
Part of the City of Edinburgh Council’s major £1.3 billion regeneration of Granton Waterfront, the Western Villages project, will now be taken forward by CCG (Scotland) Ltd following a competitive tender process.
On track to begin construction in mid-2022, Western Villages will offer a mix of one, two- and three-bedroom flats with wheelchair accessible homes and a range of tenure options including social, mid-market rent and homes for sale.
The masterplan for the area will take account of the sea views and the nearby parkland, and will focus on active travel, electric car charging points, car club spaces and public transport links.
The decision was taken by the Finance and Resources Committee on Thursday (3 March).
The City of Edinburgh Council Depute Leader, Cammy Day, said: “Particularly on the back of COP26 and our own 2030 Climate Strategy, approving this contract gives us certainty that that we’ll be able to deliver this major aspect of the Council’s £1.3 billion Granton Waterfront regeneration.
“Housing will be integral in meeting our net zero ambitions by 2030 and Western Villages will be a gold-standard for other new development across the city.
“The wider regeneration project will also create one of Europe’s largest coastal city parks, providing opportunities for residents and visitors to reconnect with the city’s waterfront by offering more areas for leisure and outdoor experiences, civic spaces and sustainable housing.”
Convener for the Housing, Homelessness and Fair Work committee, Councillor Kate Campbell, said:“The decision by Finance and Resources Committee is great news and will help us deliver this development, which will help us accelerate the delivery of affordable homes. Granton’s regeneration is a key part of our commitment to build 20,000 social and affordable homes by 2027.
“The steps we’re taking now to make homes more sustainable will make homes easier and cheaper to heat, which helps us to tackle climate change. But it’s also crucial for tenants, reducing fuel bills at a time where the cost of living crisis is pushing too many people in poverty.”
Partnering with CCG (Scotland) and architect Cooper Cromar in the creation of the new housing, the Council is also adopting CCG’s new Net Zero Home housebuilding standard for this build which will support its ambition of achieving net zero by 2030.
This standard brings improved insulation, low carbon heating and renewable technology that will help the Council make big strides in building sustainable housing for its residents.
Over the next 15 years, 3,500 net-zero carbon homes, a low energy heat network, a primary school, health centre, commercial and cultural spaces, sustainable transport provision and a new coastal park are all planned to be delivered in Granton Waterfront alongside progress underway in growing a cultural and arts cluster.
Port of Leith Housing Association has been named the 10th best housing association to work for and the 33rd best company to work for in the UK.
It is recognised as the 11th best company to work for in Scotland. Based in Leith and providing over 3,000 homes across north Edinburgh, it employs over one hundred staff who work closely with local communities.
The Best Companies rankings are based on staff feedback on workplace factors such as leadership, wellbeing and personal growth.
Heather Kiteley, Group Chief Executive said: “It is incredibly important to Port of Leith Housing Association that staff enjoy great working conditions and feel supported and motivated in their roles.
“This is captured in our strategic plan and we believe that employee engagement is key to being a brilliant company. It has been a great success to rank among the top companies to work for in the UK. I am immensely proud of all our members of staff who contribute to making our organisation a brilliant place to work.”
Three key workplace factors that stood out in Association’s Best Companies ranking were work life balance, charitable activities, and that the organisation is run on strong values and principles.
This includes an ‘open-door’ approach to leadership, referring staff members to free counselling and supporting wellbeing during lockdowns, and distributing over £200,000 to local community organisations.
This ranking comes just months after an award for Excellence from the European Foundation of Quality Management last year. The award acknowledged the flexibility and responsiveness with which the Association met the impact of the pandemic.
A selection of four-bedroom townhouses and a three bedroom mews home available in first release at Royal Blind School site
THE FIRST release of homes at the anticipated redevelopment of Edinburgh’s former Royal Blind School and Braille Press will launch to market this weekend (26th of February).
Launching from its existing Cammo Meadows development, Cala Homes (East) has confirmed that the first release of four bedroom townhouses along with a three bedroom mews home – will be available for interested buyers, with prices ranging from £810,000 to £849,995.
Located in the heart of Edinburgh’s popular Newington area, Newington Residences by Cala Homes (East) will comprise a modern reimagining of the striking original school building into 21 apartments and a further mix of new build townhouses.
Regarded as one of south Edinburgh’s best-known buildings, the original school building dates back to 1874 and has been left vacant since 2014 after pupils were relocated to a new facility.
Cala will take it back to its former glory – removing extensions and outbuildings to revitalise its surrounds.
Building on the success of its award-winning conversion of the nearby former Boroughmuir High School, the developer will refurbish the historic main building into a selection of 21 one, two and three-bedroom apartments, with selection of new build townhouses a mews home and the fully refurbished gate house also featuring within the school’s attractive landscaped grounds.
Philip Hogg, Sales Director for CALA Homes (East), said: “This is a really exciting development for us, in one of Edinburgh’s most desirable postcodes.
“There’ll be a great mix of homes likely to appeal to a broad range of discerning buyers looking for high specification finishes and a tranquil location within easy reach of the city centre and the amenities Edinburgh has to offer.
“We believe the attractive renovation at the heart will give the development real character and charm, while preserving a historic local landmark.”
The development, within the Craigmillar Park conservation area has been carefully designed to respect the surrounding area, with new build homes boasting beautiful sandstone detail in keeping with local architecture and facades of the main building.
Townhouses will range from 1600 to more than 2700 square feet, with a mix of semi-detached and terraced properties.
Sporting ceiling heights of up to 3.4 metres and many with views of Edinburgh castle and the city skyline, the apartments will see the creation of modern open-plan homes, maximising the features of the existing building, whilst delivering contemporary design, high specification and convenience with the addition of lift access to upper floors.
The first buyers are planned to move in from summer 2022, with show homes launching in April.
For more information on Newington Residences – and to register your interest – visit:
New data reveals the shocking amount of money being spent on rent every month, on top of drastic cost of living increases set for April
Over 80% of renters are spending more than 30% of their take home pay on rent every month, with women hit the hardest
Almost one in three (29%) are spending more than 50% of their monthly pay on rent
Over 85% of women spend more than 30% of their income on rent, 10% more than their male counterparts
59% of renters don’t believe their rent is affordable
New data by flatshare site SpareRoom reveals the shocking amount of money being spent on rent every month, with over 80% of renters spending more than 30% of their take home pay on rent, and almost one in three (29%) handing over more than 50% of their pay.
People spending more than 30% of their household income on rent are traditionally considered ‘rent burdened’, those who spend over 50% are considered ‘severely rent burdened’. SpareRoom’s data shows the majority of renters are currently ‘rent burdened’. This means many will already have difficulties affording necessities including food, transport and medical care on top of rent, not to mention finding money for increases in living costs come spring.
With increased energy bills and national insurance costs looming, women are most likely to feel the pinch, with over 85% spending 30% or more of their income on rent, compared to 75% of men, highlighting the affordability gap between men and women.
Unsurprisingly the data showed people in London, South East and South West England are spending more of their take home pay on rent than in other regions – 84% of Londoners, 83% of South East and 82% of South West spend over 30% of their salary on rent*.
The pandemic saw rents drop in London and increase everywhere else, but recent data from SpareRoom’s Rental Index now shows the capital’s rents are back on the up, which will no doubt cause more of an affordability issue for Londoners.
Matt Hutchinson, SpareRoom director comments: “The general rule of thumb for affordability has always been that you should spend around 30% of your income on rent.
“Even before the pandemic hit that definition felt outdated, but we’re about to see people’s financial situations hit hard over the coming months and years. With over 80% of the UK already rent burdened, and almost a third spending over half of their salary on rent, people are already feeling the squeeze.
“Although wages are rising, they aren’t growing fast enough to make up for cost of living increases that are rising at their fastest pace for 30 years**. This doesn’t just affect renters, it also makes life difficult for the huge numbers of young people who moved back home to their family over the course of the pandemic, not to mention those who were already there.”
Survey conducted by SpareRoom in January 2022 with 11,130 respondents
* What % of your monthly take home pay goes on rent?
Housing, Homelessness and Fair Work Convener, Cllr Kate Campbell wrote in yesterday’s Evening News about how the council’s housing budget is managed:
The council’s housing budget is entirely ringfenced from the rest of council spending. Tenant’s rent is only spent on housing: services for council tenants, repairs, large scale upgrades to existing homes – things like new roofs or lifts or windows – and building new council homes.
Every year we set a one year budget, which includes setting rent levels for the coming year; a ten year strategy which sets investment plans for new and existing homes; and a 30 year strategy which makes sure that the HRA remains healthy and that we can afford all of the investment we want to make.
And there is a lot of investment we want to make. We’ve proposed £2.9bn of investment in council housing over the next ten years. Much of this is about building desperately needed new council homes to replace the stock we lost through the Right to Buy policy, which has sadly seen many former council homes turn into unaffordable private lets.
We’ll also invest £850m in existing homes. Energy efficiency measures are a big part, improving the quality of life for council tenants and resulting in warmer homes that are cheaper to heat.
We’ll continue with improvements inside tenant’s homes but also spend money on communal areas and the wider estates. Tenants have said they want better bin stores, playparks, community growing spaces, benches, landscaping and planting. This will make outdoor space useable, safe and bring a wealth of wellbeing benefits.
We can’t compromise our ability to make these investments. They’re crucial to the quality of life for tenants. Which is why proposing a rent freeze this year was a hard decision to make.
Due to Covid, there have been delays to construction. At points sites were completely closed, but there have also been social distancing and health and safety requirements that have slowed work down over the last two years.
So there has been an underspend. This means that although over the ten-year plan we need the additional funding we would have got from a 1.8% rent increase, we don’t need it now. We can freeze rents and not affect investment as long as it is made up from slightly higher increases in later years.
And right now we have a cost of living crisis which is hitting people on the lowest incomes the hardest.
We’ve already seen the cut of £20 a week to universal credit – a loss of over £1000 a year to many families in Edinburgh. Energy prices have rocketed, with predictions that they’ll continue to rise.
Too many people face the stark choice between feeding their families and heating their homes. And from April 2022 there will be an increase in National Insurance contributions.
And the ONS announced last week that inflation is the highest it’s been for nearly 30 years. But while overall it’s 5.4%, essentials go up by much, much more. Again, hitting people already struggling far harder.
So a rent freeze in this exceptional year feels like a difficult choice, but the right one.
It surely goes without saying that the rent freeze has nothing at all to do with the Council elections coming up in May, of course! – Ed
Scottish House Price Index from Walker Fraser Steele
Average house price in Scotland grows by 9.3% over last 12 months
transactions up by 11% on 2019 levels
Average house price up 0.2 in November, now stands at £213, 109
31 of 32 Local Authorities continue to see rising average prices over year to end November
Alan Penman, Business Development Manager at Walker Fraser Steele, comments:“The national growth rate in house prices of 9.3% remains exceptionally high. The ongoing ‘race for space’ continues to support demand for properties that offer the room to live and work in a pandemic environment. Working from home has changed where people want to live and the type of property they want to own.
“The subsequent increase in top-end sales last year has been a result of home movers seeking out properties better suited to their updated needs. Additional support was provided through the tax savings from the Land and Buildings Transaction Tax holiday that was available up to the end of March 2021.
“This encouraged the whole market to be more adventurous. Even now, competition among purchasers, a lack of suitable stock, and the continued very low interest rates supporting affordable mortgage debt means that there is currently plenty of good headwind to sustain prices.
“So while rates of growth in house prices may be stabilising in Scotland, the housing market in November still saw an increase in the average house price of £484, which is 0.2% higher than in October.
“Sales volumes from May to November 2021 look roughly on a par with, or slightly ahead of, previous years, perhaps suggesting that the market has now returned to its pre-pandemic transaction levels, but in summary it is fair to say Scottish house prices have enjoyed another strong year often outperforming the UK average.”
Commentary: John Tindale, Acadata Senior Housing Analyst:
“The November housing market Last month we indicated that Scotland’s rate of house price growth was starting to slow, as the annual rate reduced from 13.1% in September to a (revised) rate of 11.5% in October. This month (November), the rate of annual growth continues to reduce – to 9.3% – which represents a modest quickening in the rate of decline from October.
“We would point out, however, that a national growth rate in house prices of 9.3% is exceptionally high, and does not occur particularly frequently. For example, in the 166 months since January 2008, the national growth rate in house prices in Scotland has only exceeded a rate of 9.3% on 10 occasions, with 7 of those occurring during the pandemic in 2021. Historic records would therefore tend to suggest that price growth will slow.
“However, demand for properties with more space remains high. Rightmove reported that on Boxing Day 2021, property searches on their website set new record levels, with Glasgow featuring as the fifth most searched-for location in 2021, while Edinburgh stood in ninth position.
“Competition among prospective buyers for properties remains strong, which is helping to maintain current asking prices. In addition, interest rates remain low on a historic perspective, even if the Bank of England has been dropping hints that rates are likely to move up in the near future.
“In Scotland’s housing market in November, there has been an increase in the average house price of £484 in the month, which is 0.2% higher than in October. The reason for the fall in the annual rate of price growth this month arises from the strong performance in the market twelve months previously, when prices rose in the month of November 2020 by 2.3% – an increase of only 0.2% in November 2021 hence pales into insignificance by comparison.
Figure 1 below shows the movement in annual growth rates over the last 2 years. Although the trendline has a downward track over the final three months of the graph, it ends at a higher level than is currently seen. The answer to the question concerning the direction of travel in house prices in Scotland consequently remains too evenly balanced for a definitive conclusion to be reached.
Transactions analysis
Monthly transaction counts
Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to November 2021, based on RoS (Registers of Scotland) figures for the Date of Entry. (November 2021 figures are based on RoS Application dates.)
The fall in the number of transactions at the onset of the pandemic in March/April 2020 is clearly visible – the March 2020 property sales that actually took place would largely have been agreed prior to the commencement of the first lockdown in Scotland on 24 March 2020. However, what is also clear is the recovery in sales during the summer of 2020, followed by an acceleration from August 2020 to a peak of 13,022 transactions in October 2020 – the highest number in a single month since November 2007.
It can be seen too that sales per month from September 2020 to March 2021 were at higher levels than the previous five years, as the market played ‘catch-up’ with the lost transactions during the spring and early summer months, and also took advantage of the LBTT tax reductions which were on offer from 15 July 2020 to 31 March 2021 (inclusive).
Also noteworthy is the spike in sales in March 2021 – as the tax reduction expiry date approached – as is the fall in sales in April 2021, indicating the extent to which buyers had managed to bring forward their purchases into March 2021 to take advantage of the LBTT tax savings.
Sales volumes from May to November 2021 look roughly on a par with, or slightly ahead of, previous years, perhaps suggesting that the market has now returned to its pre-pandemic transaction 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 eleven 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 totals.
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 977 sales in excess of £750k during the first eleven months of 2021, and we anticipate there will be at least 23 additional sales in November 2021, not yet recorded by the Registers of Scotland and hence not included in the above total. Sales of high-value properties to the end of November 2021 will therefore likely reach 1,000 in number by the end of the month and approach 1,100 by the end of the year. Hence annual transactions of £750k or higher in 2021 will likely double those seen in 2018.
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 look for 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, available up to the end of March 2021. This encouraged the whole market to be more adventurous in its outlook.
However, even with the additional 23 as yet unrecorded sales being taken into account, November 2021 becomes the second month in a row in which the number of homes purchased having a value of £750k or higher will be lower than that recorded in the same month of the previous year.
Annual change
The average house price in Scotland has increased by some £18,000 – or 9.3% – over the last twelve months, to the end of November. This is a reduction from the £21,800 growth seen to the end of October 2021, and is the second month in succession in which the annual rate of house price growth has slowed, having reached an annual rate of 13.1% in September 2021. In November, Scotland’s growth rate trails Wales’ 9.4% by 0.1%, but in percentage terms is still higher than the nine GOR regions in England.
In November 2021, 31 of the 32 local authority areas in Scotland saw their average prices rise over the previous twelve months. The one area with a price fall compared to one year earlier was Na hEileanan Siar – but low transaction counts on the Islands often cause unexpected results due to the volatility in the price of the small number of sales – there were just 25 transactions in Na h-Eileanan Siar in November, compared to over 700 in both Edinburgh and Glasgow.
The area with the highest annual increase in average house prices in November was Argyll and Bute, where average prices have risen by 17.8% over the year and by 4.6% in the month. Statistics for the month include the sale of the Ferry Inn House on the Rosneath Peninsula.
The Ferry Inn House was once owned by Princess Louise, the daughter of Queen Victoria. It sold for just under £1 million. The data for Argyll and Bute in November also includes the sale of a further £1 million detached property on the outskirts of Oban, with 11 bedrooms, 5 bathrooms and 17 acres of land.
With these two properties having been sold in the month, it is little wonder that average prices in the area have seen such rapid escalation.
Monthly change
In November 2021, Scotland’s average house price in the month rose by some £500, or 0.2%, compared to a fall of £70 in October. The average price of a home in Scotland now stands at £213,109, which sets a new record level for the nation for the eighth time in the last twelve months.
In November, 20 Local Authority areas in Scotland experienced rising prices in the month, with only 12 seeing prices decline. The largest increase in average prices in November, of 10.2%, was in the Shetland Islands, followed by the Orkney Islands at 7.0%, but as indicated above, Scotland’s Island groups tend to see volatile price movements, due to the low number of sales each month.
On the mainland, Inverclyde saw the largest increase in prices in the month, of 4.6%. This increase in average price was helped this month by the sale of a modern detached home, overlooking the Firth of Clyde, in Gourock, for £650k.
On a weight-adjusted basis, which takes into account both the increase in average price and the number of transactions involved, six local authority areas in November were responsible for 54% of the positive movement in Scotland’s average house price. These were, in order of influence, South Lanarkshire, Argyll and Bute, Perth and Kinross, Highland, Falkirk and Moray. At the opposite end of the scale three authorities were responsible for 60% of the fall in prices in the month, being the City of Edinburgh, East Renfrewshire and East Lothian, with the overall rise in prices outweighing the falls by £484.
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 November there are 14 such authorities, up from 12 in October. In October, it was noticeable in Table 3 that four of the top six local authority areas ranked by price had reached new record levels: however, in November almost the opposite applies, with only one of the top six areas by value having established a new record price. Prices in the other five areas all fell in the month, with semi-detached homes in these areas tending to see the largest falls in average values.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending November 2021. As reported above, all but one of the 32 local authority areas in Scotland are reporting an increase in their housing values over the last year. The one area with negative growth is Na h-Eileanan Siar, where prices over the year have fallen by -4.6%. The highest increase over the twelve months to November 2021 was in Argyll and Bute at 17.8% with near neighbour East Dunbartonshire being in second place at 16.3%.
