The property market in Scotland has remained healthy over the last 12 months with the average selling price of residential properties up almost 4% in a year. The average price of a home north of Hadrian’s Wall is now £180,000 and the combined value of the country’s housing stock £18.1 billion.
However, much like a microcosm of the whole of the UK, there is significant variation in how property prices have performed in different regions of Scotland. Midlothian, the central Scotland region that includes the capital Edinburgh saw price gains of 8.7% over the course of 2018. The next best performing regions were Falkirk and North Lanarkshire, which both also saw gains of 8%.
The only two regions to see price falls were Aberdeen, down 1.9% and the Scottish Borders with a modest slide of 0.4%. Aberdeen’s woes could be said to reflect those of London and the south east with the UK’s oil industry capital now paying the price for years of soaring prices.
As the main HQ of the North Sea oil industry, property prices in and around Aberdeen had seen spectacular gains in the years running up to 2014. However, they have since crashed along with the price of oil, down around 20% over the past 5 years. Lower oil prices and production capacity in North Sea fields dropping and becoming more expensive has seen a significant pullback in investment by oil companies. That’s meant a drop in the number of oil industry workers living in and around the city and a direct impact on demand for high end property.
Edinburgh saw the best gains of Scotland’s major cities, with average prices up 6.6%. It’s also now the place with the highest average prices, having overtaken East Renfrewshire. The average sales price of a home in the capital is now £266, 118. However, there are signs that the next couple of years may not be as strong for Edinburgh property prices. The total number of transactions in the city dropped 8.8% on 2017 levels. Countrywide sales number fell 2.3%.
The drop in the number of sales, particularly in Edinburgh, is being put more down to limited supply meaning there are simply not enough homes on the market. That’s attributed to the pipeline of new-build properties falling rather than a Brexit effect. However, as is the case across the rest of the country, analysts warn that the mood and market could turn over the next couple of years if Brexit has a major negative impact on the economy. But for now at least, Scotland is proving one of the most attractive locations in the UK to hold investment properties.