Scotland’s country market sees brisk activity in the third quarter
Buyers and sellers motivated to get deals done ahead of potential slowdown
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Prime Scottish Index 109/ Small Country House 107.3/ Large Country House 103.4
Scotland’s country market saw brisk activity in the third quarter, as buyers and sellers brought plans forward in the face of growing uncertainty in the mortgage market.
The Scottish rural market is traditionally highly seasonal with limited activity during the winter. However, in the face of spiralling energy and borrowing costs, some sellers aren’t waiting for the spring market.
“We have new instructions to go live now and some for November, which is unusual. Sellers are scratching their heads about the best way to time things,” said Tom Stewart-Moore, head of Knight Frank’s rural business in Scotland.
Financial markets have reacted negatively to the government’s mini-budget last month, which has sent the cost of fixed-rate mortgages higher. The uncertainty continued last week with the sacking of chancellor Kwasi Kwarteng.
Consequently, we have revised our UK House Price Forecasts down.
As a result of the uncertain outlook, some buyers are attempting to lock in mortgage deals sooner rather than later, even as the escape to the country trend that drove activity to a peak last year has softened.
Offers accepted climbed 7% in the three months to September versus the five-year average. Exchanges (concluding missives) increased by 12% in the same period (see chart).
Viewings were flat in the three months to September versus the five-year average, and supply in the 12 months to September was 21% lower than the previous year.
Regional variation
Scotland saw a varied performance by region. East Lothian performed strongly, and the west coast and islands continued to prove popular with English buyers seeking second homes.
“Good houses in a good area are still selling for a premium. However, the change has been that homes that aren’t grade-A are taking longer to sell. There are still buyers out there with money to spend, but people are being more cautious,” said Tom.
The average price of a property was unchanged on a quarterly and annual basis in the three months to September.