Lomond Insights: Scottish Property Market Q3 Review
As we leave summer and head towards what is typically the busiest time of the year in the Scottish property market, we look back at the trends and statistics of 2023's third quarter. Property prices continue to change, and the levelling out of interest rates have seen varying moods in the property market.
Rents continue to rise rapidly, with Scotland experiencing the highest annual rental growth of all the UK regions1. A critical element of this is rent control, introduced in Scotland in September 2022, which caps increases for existing tenancies at 3% a year. When properties become vacant landlords may reset rent to full market rate.
This has fuelled record rental growth as landlords maximise rents for new tenancies to cover higher costs and allow for rent increases being capped throughout the tenancy. There is a gap in the market where landlords have left the sector due to increased regulation and taxation.
Significant gains can be made by those with a longer-term view, with capital appreciation and strong rental growth. Student properties in Glasgow, Edinburgh, and St Andrews are in high demand. Rents have seen a substantial increase, climbing from a historical average of £300 per room to £500 – £600.
David Alexander, Chief Executive Officer, said, “Demand in the rental market is vastly outstripping supply. With around 40,000 people looking to view one hundred of our flats in July, properties are moving very quickly.”
In the sales market, there has been a slight softening in prices and demand, but no major drop. Realistic pricing is important, and we have been advising sellers who are listing too high to adjust prices slightly; the property they are about to purchase is also likely to be priced lower than a year ago.
Properties are taking slightly longer to sell with the average period rising by around two weeks. Location remains key, and well-presented properties in the right area at the right place will have no problem selling. Although inflation is coming down, market conditions will remain challenging into 2024, with no significant price rises or falls anticipated.
HOW WE PERFORMED IN Q3
Despite changes in the markets across Scotland, our teams of property experts delivered brilliant service to our thousands of customers.
While we continue our efforts to grow the company even further, our teams produced the following numbers in Q3:
SALES (per branch)
- 25 new instructions
- 259 applicants
- 14 contract exchanges
- 10 applicants per property
LETTINGS (per branch)
- 50 new instructions
- 186 applicants
- 4 applicants per property
- 195 new tenancies agreed
You can read the full summary of Q3 below, or click here to read how Lomond are transforming the property market.
Dataloft Rental Market Analytics, based on new tenancies in 12 months to end of May 2023. St Andrews based on LA of Fife, Aberdeen on City of Aberdeen and Aberdeenshire.