Richard Hepburn

It could be argued that, compared to the England and Wales property market, the Scottish market entered Q2 at something of a disadvantage as Covid restrictions stayed in place longer than the rest of the country, before being relaxed in April. But despite the after-effects of this dampening factor, the Scottish property landscape has performed fairly well in the last quarter.

In the latest quarterly Property Trends Report from our parent company, Landmark Information Group, we present April-June 2022 data on listings, Sold Subject to Missives, completions and registered sales. This represents a particularly useful opportunity to check in and evaluate the trends appearing over the quarter and in doing so, gain a real-time picture of the state of the Scottish property market.

There are a few key observations I have taken from the data:

Supply vs. demand

Like England and Wales, June data suggests that the demand-to-supply ratio is evening out after suppressed supply during the rest of H1. With seller confidence on the up, supply has followed suit and we closed out the quarter with listings at their highest rate since December 2021. June and July are traditionally strong months for listings, so I very much hope to see June’s listing trend hold.

Registered sale volatility

We do, however, see some volatility in terms of the Registered Sales levels, which can of course be attributed to multiple factors. Unlike England and Wales, however, we would not expect the major culprit to be the sale process itself – properties in Scotland continue to move through the sale transaction process at around 2X the rate of the rest of the country. So, the most likely impact will be the rate of SSTM in the preceding months, which is itself influenced by supply, lending and overall market confidence.

Pressure on price

As we look ahead to the coming months, one aspect that I will be keeping a watchful eye on is affordability. There are rumblings on both sides of the border about tightening lending policies and affordability concerns as the cost-of-living crisis continues to dominate the headlines. The reality is that buyers at the lower end of the market are likely to feel any tightening up the most keenly. There are currently no signs of the Scottish government introducing support measures for first-time buyers, which could compound the issue. In contrast, Scottish properties at the higher end of the market – particularly in Glasgow and Edinburgh, as well as rural estates – remain in high demand, suggesting continued buyer confidence at the premium end of the market. Interestingly, despite Aberdeen’s mini oil-boom resurgence in recent times, the city continues to have selling times amongst the longest in Scotland.

So what lies ahead for the Scottish property market? Our Q3 data, which we will publish in October 2022, will be the litmus test for whether June’s upturn in supply really will open up more choice and fire up confidence in the market again. But equally, I will be watching out for signs of a switch towards a buyer-led market, with a glut of available properties and more nervy purchasers at the lower end of the market, potentially in lower numbers. We would all prefer to see the former, but with so many contributing factors at large it would be remiss to assume that Q2’s decent performance is a trend just yet.

Landmark’s Q2 2022 Property Trends Report for Scotland can be found here. Landmark’s Q2 2022 Property Trends Report for England and Wales can also be found here.

Richard Hepburn is managing director at Millar & Bryce