Savills World Research
UK Residential
Spotlight
Tayside Residential Market
Summer 2015
Craigisla Lodge, Kilry, Perthshire sold in March this year,
well in excess of its asking price of Offers Over £350,000.
SUMMARY
Prime activity in Tayside is shifting to a new level and creating affordable opportunities
■ There is an increasing level of
residential activity in Tayside below
£400,000, although the market
above this level is more cautious.
Table 1
Five year residential values annual change forecast
Area
2015
2016
2017
2018
2019
■ There has been a phenomenal
increase in Scottish prime and
million pound sales but growth
has been concentrated in core city
hotspots.
Prime GB regional
1.0%
6.0%
5.0%
5.0%
5.0%
Prime Scotland
0.0%
4.0%
4.5%
4.0%
4.0%
Prime Tayside
0.0%
3.5%
4.0%
3.5%
3.5%
■ Lack of residential development
activity in Tayside is supporting high
new build values, particularly in the
main urban locations of Perth and
Dundee.
Mainstream UK
2.0%
5.0%
5.0%
3.0%
3.0%
Mainstream Scotland
3.5%
4.0%
4.0%
2.5%
2.5%
Mainstream Tayside
3.0%
3.5%
3.5%
2.0%
2.0%
Source: Savills Research
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Spotlight | Tayside Residential Market
The market in Tayside
Properties in Tayside below £400,000
have traded well during the year ending
March 2015, although the market has
been more cautious above this level.
Careful marketing, including targeting
and appropriate pricing, has been key
to successful sales. While there was
some demand from further afield, the
majority has been from local buyers
in the lower price brackets. Looking
ahead, the region is likely to see the
return of London property equity. As
the heat comes off values in the UK’s
capital, buyers may well decide that it
is a good time to purchase in Scotland,
which is a rising market and continues
to offer value for money.
Residential sales activity across
Tayside increased annually by 6%,
in line with the rest of Scotland.
There were a number of areas which
outperformed, including Perth &
Kinross, which saw a 14% increase
in activity.
There was a 29% annual rise in
sales at £1m and above across
Scotland, reaching 188 during the
year ending March 2015. This is a
small but important sector of the
Tayside market which saw six such
sales during this period.
An emerging market between £200,000 and £400,000
n All residential transactions in Tayside
n £200k - £400k share
8,000
18%
17%
7,000
14%
14%
14%
16%
13%
6,000
5,000
5,642
5,297
14%
6,805
6,431
12%
5,296
10%
4,000
8%
3,000
6%
2,000
4%
1,000
2%
0
0%
Year to March
2011
Year to March
2012
Year to March
2013
Year to March
2014
Year to March
2015
Source: Registers of Scotland / MyHousePrice.com / Savills Research
table 2
Strong growth in transactions at £400k and above
Year to
Mar 11
Year to
Mar 12
Year to
Mar 13
Year to
Mar 14
Year to
Mar 15
2,320
2,190
2,086
2,754
3,663
Edinburgh City
712
698
702
899
1,260
Aberdeen area
417
453
397
591
772
Greater Glasgow
432
396
351
496
674
Area
SCOTLAND
Lothians & Borders
220
191
193
262
303
Sales activity in Dundee remained
stable across all price bands. There has
been little in the way of new housing
development, which would have the
potential to stimulate further sales
activity among buyers and sellers alike.
Tayside
135
119
107
151
161
Fife
97
97
92
99
146
Stirling area
90
79
86
89
114
Highlands & Islands
66
42
50
47
78
Ayrshire
66
61
47
67
76
There was an annual rise of 2% in
sales activity in Angus across all
price bands. However, within that
geographical area, the number of
properties selling between £200,000
and £400,000 saw a significant
increase of 60%. This surge is likely
to fuel the market further up the chain
in the second half of 2015 as those
sellers trade up the property ladder.
Housebuilding in Aberdeenshire
increased by 48% last year, absorbing
buyer demand for prime housing
(above £400,000) which had been
spilling out from Aberdeen City into
Angus in previous years.
Argyll & Bute
45
34
26
28
45
Dumfries & Galloway
40
20
35
25
34
Properties in Tayside locations that
are easily commutable to Edinburgh,
Glasgow or Aberdeen have performed
relatively well. These areas include
Kinross, Auchterarder and North
Angus/Kincardineshire.
02
GRAPH 1
Source: Savills Research / MyHousePrice.com
Tayside has traditionally been a
relocation hotspot and it continued
to attract second home owners and
retirement buyers from outside the
region within lower price brackets.
However, those investing further up the
market, often from south of the border,
may have been holding back in the
light of continued political uncertainty.
Looking forward, Tayside is likely
to see further growth over the next
five years, albeit at a slower rate
compared to Scotland’s city hubs.
As a consequence, there will be
opportunities for buyers to take
advantage of relative affordability.
Prime city hotspots
Prime residential (second hand
£400,000 and above) led the Scottish
housing market during the year
ending March 2015, with a 33%
annual increase in activity. There were
3,663 prime sales recorded during
this period, boosted by purchasers
taking advantage of favourable tax
rates, ahead of the introduction of the
more punitive charges which were
introduced as part of the Scottish Land
and Buildings Transaction Tax on 1
April this year.
Scotland’s prime market was
enhanced by the core hubs of
Summer 2015
GRAPH 2
Prime city values grow but country sees little change
n Prime Edinburgh City n Prime Edinburgh Country n Prime Tayside
n Prime Glasgow City n Prime Glasgow Country
120
115
above £400,000, there was only a 6%
annual increase across the market as
a whole, which is more dependent on
the vagaries of the mortgage market.
While there were lower rates of lending,
banks continue to be cautious with
regard to mortgage approvals.
Savills Prime Index
110
The UK Government’s Help to Buy
Scheme, designed to support those
aspiring to purchase following the
property market crash, enabled 8,686
sales, which represented 7% of all
Scottish sales between October 2013
and December 2014.
105
100
95
90
85
80
75
70
2007
2008
2009
2010
2011
2012
2014
2013
2015
Source: Savills Research
table 3
Million pound sales surge prior to LBTT
Year to
Mar 11
Year to
Mar 12
Year to
Mar 13
Year to
Mar 14
Year to
Mar 15
SCOTLAND
151
129
120
146
188
Edinburgh City
71
59
53
66
98
Aberdeen area
14
20
24
26
26
Greater Glasgow
29
19
14
19
30
Lothians & Borders
7
5
8
11
14
Fife
7
5
4
6
9
Tayside
7
12
4
9
6
Stirling area
5
3
3
5
1
Ayrshire
2
5
3
2
1
Highlands & Islands
5
0
3
1
1
Argyll & Bute
1
1
3
1
1
Dumfries & Galloway
3
0
1
0
1
Source: Savills Research / MyHousePrice.com
Edinburgh, the Aberdeen area and
Greater Glasgow, where activity
collectively increased annually by
36%. Together they accounted for
74% of all the transactions that took
place in Scotland.
Edinburgh saw a 40% annual growth in
prime sales, with the majority of activity
in suburban hotspots. The New Town,
Stockbridge and Inverleith were in
particular demand last year.
Buoyancy remains in the Aberdeen
housing market despite the fact some
of the heat has been taken out due
to the uncertainty within the oil-
dependent local economy. Aberdeen
City saw annual growth in prime sales
of just 11%, due to a lack of available
property. However, buyer demand has
trickled outside the city boundaries
into Aberdeenshire where there was a
massive 57% increase in prime sales.
Greater Glasgow saw a significant
annual growth in prime sales of 36%.
The city itself is leading the way with
strong performance across not only
core West End and Pollokshields, but
also Broomhill and Jordanhill.
Slower mainstream
While there was a 33% rise in sales
We are likely to see an increase in
buying activity and values during
the remainder of 2015, following the
introduction of LBTT which will benefit
purchasers of homes below £334,000.
Annual transactional growth in
Perth & Kinross, Moray, Argyll &
Bute, Glasgow City, Edinburgh
City, Lanarkshire, Dunbartonshire,
Highlands, Renfrewshire and West
Lothian was higher than the figure
for Scotland as a whole.
On the other hand, key locations,
which are traditionally in demand
due to good schools, local amenities
and high quality properties, such as
East Lothian, East Renfrewshire and
Aberdeen City, have lagged in terms of
activity. However, they have all suffered
from a lack of supply, which has
ensured prices have been supported.
Million pound market
The Scottish million pound market
has had its strongest quarter for 10
years with 66 sales taking place from
January to the end of March 2015.
There were a total of 188 sales during
the year ending March 2015, the
strongest year since 2008.
The high number of sales at this level
was artificially boosted by the prospect
of the new Scottish Land and Building
Transaction Tax, which was introduced
on 1 April, adding a 79% increase in
tax for those buying at exactly £1
million and rising progressively in
relation to the value of the property.
As in past years, the majority of such
sales took place in Edinburgh City, with
98 sales recorded, followed by Greater
Glasgow with 30 such sales recorded.
The Aberdeen area has slipped to third
place with 26 such sales recorded
during the year ending March 2015.
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03
Spotlight | Tayside Residential Market
Development
As part of the Scottish Cities Alliance
to promote inward investment
across the country, Perth has been
promoted to investors from around
the world, most recently at the
24,000 delegate MIPIM property
exposition in Cannes.
The population of Perth & Kinross is
projected to rise by some 20% over
the next 20 years, compared to 7%
across Scotland as a whole over the
same period.
Several ambitious inward investment
projects are planned, including Perth
Food and Drink Park, an extension
to the Inveralmond Industrial
Estate, new business space at
Perth Harbour, offices and leisure
facilities at Broxden and significant
improvements to the city centre’s
retail and cultural leisure facilities.
In order to support this growth the
Council has identified a number of
strategic infrastructure and housing
projects around the city which will
provide new upgraded junctions and
improved access from the A9 across
the River Tay to the A93 and A94, a
new High School and 5,000 houses on
GRAPH 3
Current new build asking price per square foot
Lack of supply lifts new build values in urban locations
£250
£212
£207
£200
£202
£194
£186
£184
£176
£174
£150
land to the north west of Perth
at Almond Valley and Bertha Park.
Having a joined up approach to inward
investment and the delivery
of infrastructure and housing is key
to realising the potential that Perth
has to play an enhanced role in
growing Scotland’s economy.
After many years of planning delays,
new homes must be delivered in the
new few years to encourage new
employers to move their operations
to Perth and for existing business to
have the confidence to expand their
presence in the city. n
OUTLOOK
The market in 2015 and beyond
■ Tayside is likely to experience further growth
in values over the next five years, albeit at a lower
level than Scotland’s city hubs.
■ Key infrastructure and much needed housing
projects planned around Tayside have the potential
to stimulate activity among buyers and sellers alike.
£100
£50
£0
Dundee
Kinross
Perth
Auchterarder
Carnoustie
Arbroath
Monikie
Blairgowrie
■ The population of Tayside is projected to rise
by some 12% over the next 20 years, including
a 20% increase expected in Perth & Kinross,
compared to 7% across Scotland as a whole.
Source: Savills Research
Please contact us for further information
Faisal Choudhry
Residential Research
07967 555 720
[email protected]
Andrew Perratt
Head of Scotland
Residential
07967 555 402
[email protected]
Ruaraidh Ogilvie
Head of Tayside
Residential
07967 555 439
[email protected]
Carl Warden
Tayside Residential
07812 965 349
[email protected]
Katherine Farmer
Tayside Residential
07807 999 519
[email protected]
Fiona Gormley
Head of Aberdeen
Residential
07807 999 151
[email protected]
Glossary of terms
Prime: refers to the most desirable and aspirational property by reference to location, standards of accommodation, aesthetics and value (second hand £400,000 and above). Typically it
comprises properties in the top three per cent of the Scottish market by house price.
Mainstream: refers to the bulk of the housing market.
Tayside: refers to the Local Authority areas of Angus, Dundee City and Perth & Kinross
This document was published in May 2015. The data used in the charts and tables is the latest available at the time of going to press. Sources are included for all the charts.
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