Lomond Insights: Scottish Property Market Q2 Review
As we reached the midway point of the year, the Scottish property market looks different to the end of its first quarter. Price and inflation changes have knock-on effects in the selling and buying market, while announcements for the private rental sector broke new ground.
A shortage in supply and continued high demand in the rental market fuels activity, with an astounding 75% of listed properties having been let within a week. Many areas are experiencing double-digit annual rental growth for newly-agreed lets. Whilst there is less movement in the market, as more renters choose to stay put, alongside the moratorium on evictions and 3% cap on rent increases until at least the end of September 2023.
Currently, across Scotland, the median proportion of gross income spent on rent is 22.8%, slightly higher than the five-year average of 22.1%. The median income of a renter in the area is just below £29,000.
Scotland's property market maintains a firm position due to strong buyer affordability. The robust activity levels are underpinned by high demand from both home movers and first-time buyers across our markets. Presently, house prices in Scotland stand at 4.4 times the average earnings, substantially lower than the national average of 6.8. Moreover, first-time buyer mortgage payments as a percentage of take-home pay are the lowest in the United Kingdom, according to Nationwide.
Demand remains strong for properties in our towns and suburbs, especially 3- and 4+ bedroom houses, as home movers seek to upsize. Additionally, first-time buyers are actively looking for ready-to-move-in smaller apartments, with a focus on city-centre living.
Pricing in the property market north of the border continues to be supported by this strong demand. Currently, most of our network sales are at, or exceed, the Home Valuation Report. While the year-on-year price growth in Edinburgh, Glasgow, St Andrews, and Aberdeenshire has softened compared to a year ago, there is still little evidence of significant price moderation, according to the UK House Price Index.
HOW WE PERFORMED IN Q2
Despite uncertainties in the current markets, our property experts continue to deliver 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 Q2:
SALES (per branch)
- 21 new instructions
- 289 applicants
- 9 contract exchanges
- 14 applicants per property
LETTINGS (per branch)
- 24 new instructions
- 136 applicants
- 6 applicants per property
- 184 new tenancies agreed
David Alexander, Chief Executive Officer, summarised: “Sales activity remains buoyant with property prices remaining firm [while] rental properties continue to let quickly and at asking price.”
You can read the full summary of Q2 below, or click here to read how Lomond are transforming the property market.