Scotland’s country house market makes slow return from lockdown

Country house prices in Scotland fell in the second quarter of 2020, as post-lockdown activity levels picked up more slowly than in Edinburgh.

Outside of Edinburgh city, new instructions to sell in Scotland were 50% below the five-year average between the lifting of restrictions on 29 June and mid-July. New prospective buyers were down 60%, and viewings were 36% lower.
In contrast to Edinburgh’s city market, trading activity in Scotland’s country house market is more irregular due to its seasonality and the discretionary nature of buyers and sellers.

“The next few months will be key,” said Tom Stewart-Moore, head of Knight Frank’s rural business in Scotland. “There is a real window of opportunity for buyers and sellers, and July, August, September and possibly into October, will be key months.”

Offers made in Edinburgh were 141% higher over the same period. Meanwhile, the number of new prospective buyers and viewings in Edinburgh were also up, rising 165% and 42%, respectively. 

Prime Scottish Index

The slow restart came as Scottish country house prices fell 0.1% in the second quarter of the year. On an annual basis price growth was flat.

In Scotland, houses valued at £3 million-plus were the weakest performers in the second quarter of 2020, registering a 0.2% fall in the three-month period.

This was in contrast to England where country houses valued at £5m-plus saw the strongest price growth of any property type in the UK in the three months to June with an increase of 1.2%, as buyers looked to move quickly to secure property outside of London.

Country House Prices

Country house prices in Scotland have increased 1% in the past ten years, while in England country house prices have risen 9%. Both markets remain well below their 2007 peaks.

“Property in Scotland is already seen as very good value for money and the shift that’s been accelerated by Covid-19 towards greater home working will fit well with this,” said Tom. “I think the events of the past few months could be the catalyst that finally sees rural property prices in Scotland increase as they have done elsewhere.”

In a bid to stimulate the Scottish housing market, The Scottish Government has recently introduced a Land and Buildings Transaction Tax holiday running until 31 March. The move has seen the level the tax in paid at raised from £1450,000 to £350,000 in a bid to stimulate the housing market after Covid-19. This is due to run until 31 March 2021.

While the move will provide a short-term boost, the twin issues of Brexit and the unwinding of the UK’s job retention scheme in the coming months, retain the potential to negatively affect buyers and sellers’ sentiment north of the border.

Photo by Micheile Henderson on Unsplash