scottish country house index - knight frank · prime country house prices in scotland rose 0.4%...
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PRIME MARKET UPDATEActivity levels remained relatively constant in the prime market in Scotland in 2018, helping to underpin a modest rise in values during the year.
Prime country house prices in Scotland rose 0.4% between October and December 2018, the sixth consecutive quarter of growth, according to the Knight Frank Scottish Country House Index. On an annual basis, values ended the year 2.3% higher.
Despite this period of sustained growth, values still sit around 20% below pre-crash peak levels.
As a result, our sales agents note that many country locations currently offer relative value for money, especially when compared with prime markets elsewhere in the UK. This has helped underpin demand, which has stayed relatively constant amid a more
uncertain political backdrop as the UK’s EU departure nears.
Across Scotland, the number of sales of homes valued above £500,000 increased by 2% during the 12 months to September 2018 compared with a year earlier and was 20% higher than in the same period to September 2016. The number of transactions above £1m was 3.3% higher year-on-year.
While much of the increase over the past two years can be accounted for by a rise in transactions in urban locations, there has also been a pick-up in activity in rural markets within commuting distance of city hubs including in the Scottish Borders and the Lothians.
However, a slowdown in the number of homes being listed for sale at the top end of the market, exacerbated by the political situation, could cause activity levels to slow in early 2019.
TAXING TIMESThere is also the prospect of an increase in tax for buy-to-let investors and second-home buyers after the Scottish government announced plans to raise the additional tax levied on these purchases from 3% to 4% of the purchase price.
The proposal, which will be effective from the 25th January 2019 if approved by the Scottish Parliament, is the latest in a long line of tax changes introduced in Scotland. It will see the tax bill for a second home purchaser buying a £500,000 property rise from £38,350 to £43,350. As has been the case with previous pre-announced tax increases, we may see a modest spike in activity ahead of its introduction.
KEY FACTS FOR Q4 2018
£500,000+ SALES WERE 20% HIGHER THAN IN 2016, DURING THE 12 MONTHS TO SEPTEMBER
QUARTERLY PRICE GROWTH FOR PRIME PROPERTY IN SCOTLAND
0.4%
£1M+ TRANSACTION VOLUMES ROSE BY 3.3%, THE LATEST FIGURES SHOW
VALUES ARE STILL SOME WAY OFF PREVIOUS PEAKS
ANNUAL PRICE GROWTH FOR PRIME PROPERTY IN SCOTLAND
2.3%
0
20
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60
80
100
120
140
160
180
200
DecNovOctSepAugJulJunMayAprilMar
FIGURE 1 FALLING STOCK LEVELS IN THE PRIME MARKET Total number of new £500,000 listings in Scotland*
Source: Knight Frank Research *excluding city markets
Oliver Knight, Residential [email protected]
SCOTTISH COUNTRY HOUSE INDEX Q4 2018
Source: Knight Frank Research
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Dec-
18
Sep-
18
Jun-
18
Mar
-18
Dec-
17
Sep-
17
Jun-
17
Mar
-17
Dec-
16
Sep-
16
Jun-
16
Mar
-16
Dec-
15
Sep-
15
Jun-
15
Mar
-15
Dec-
14
Sep-
14
Jun-
14
Mar
-14
Dec-
13
Sep-
13
Jun-
13
Mar
-13
Dec-
12
Sep-
12
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Dec-
18
Sep-
18
Jun-
18
Mar
-18
Dec-
17
Sep-
17
Jun-
17
Mar
-17
Dec-
16
Sep-
16
Jun-
16
Mar
-16
Dec-
15
Sep-
15
Jun-
15
Mar
-15
Dec-
14
Sep-
14
Jun-
14
Mar
-14
Dec-
13
Sep-
13
Jun-
13
Mar
-13
Dec-
12
Sep-
12
ANNUAL QUARTERLY
ANNUAL QUARTERLY
FIGURE 2 PRIME SCOTLAND PRICE CHANGEAnnual and quarterly % change
Cottage Farmhouse Small country house
Large country house
Average
3 month 0.0% 0.5% 0.3% 0.4% 0.4%
6 month 0.0% 1.4% 0.9% 1.2% 1.1%
1 year 3.4% 2.3% 1.9% 2.5% 2.3%
Source: Knight Frank Research
FIGURE 4 PRIME SCOTLAND PRICE CHANGE Q4 2018
up to £500k £500k to £1m
£1m to £2m
£2m to £3m
£3m+
3 month 0.7% 0.3% -0.2% 1.1% 1.2%
6 month 1.4% 1.5% -0.1% 2.1% 1.2%
1 year 2.8% 2.4% 1.1% 3.8% 3.1%
SCOTTISH COUNTRY HOUSE INDEX
Important Notice. © Knight Frank LLP 2018 – This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.
Ran Morgan +44 13 1222 9600 [email protected]
If you’re thinking of moving in or out of Scotland, or would just like some property advice, please do get in touch.
Please contact us for further information
OUTLOOKAgainst the backdrop of Brexit negotiations, it is likely that current market conditions will continue in the short-term with pricing expected to remain subdued. However, the relative value on offer across prime markets in Scotland should underpin demand.
Our forecast for prime regional housing markets across the UK is for 0.5% growth in 2019 and cumulative growth of 8.2% between 2019 and 2023.
Source: Knight Frank Research
FIGURE 3 KNIGHT FRANK PRIME REGIONAL MARKET FORECASTAnnual % change
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
202320222021202020192018
0.6%0.6%
1.5% 1.5%
2.0%
2.5%
202320222021202020192018
0.6%0.5%
1.5% 1.5%
2.0%
2.5%