Knight Frank reports that prices have dropped for prime property in Scotland while buyer interest remains stable, particularly from buyers located in the U.S., Germany, Canada and Australia. The third-quarter drop of 0.6% brought the annual decline in luxury property prices to 3% and experts say part of the reason is that more interested buyers are having trouble securing financing. Luxury real estate in some areas like the Borders and in the northern part of Scotland have remained steady, and prices in the Lothians have improved, which shows that activity in the market segment remains mixed. For more on this continue reading the following article from Property Wire.
Prime property prices in Scotland fell by 0.6% in the third quarter, taking the annual decline in prices to 3%, a moderation from the 4% annual fall in the second quarter, according to the latest figures from Knight Frank.
It quarter three index shows that there was little sign of a summer lull in terms of buyer interest, with new buyer registrations up 38% compared to the same period last year. But signs of activity in the market remain mixed.
While the number of concluded missives was up 18%, the data for sales under offer, which captures home purchases earlier in the sales process, showed a 12.5% fall.
However a snapshot of Knight Frank’s global property search engine shows a 56% rise in searches for Scottish property by those in the UK and overseas in the third quarter compared to the same period last year.
Some 30% of all web searches originate from overseas, underlining Scotland’s international appeal, the property firm says. Interest has been coming from the United States, Germany, Canada and Australia.
‘It has been noticeable over the last six months the volume of our prime property which has sold to buyers from outside Scotland. Domestic buyers are still struggling with a lack of mortgage finance, which continues to impact the country house market, especially properties priced at up to £1.5 million,’ said Ran Morgan, head of Knight Frank’s Scottish residential department.
‘Transactions also remain sticky around the £2 million mark, given the new, higher, stamp duty charges, although activity picks up again in the market for properties worth £2.5 million or more,’ he added.
The index shows, however, that price falls moderated in most regions, with luxury property values in the North of Scotland and the Borders holding firm during the three months to the end of September. There was also a marked improvement in price performance in the Lothians, where price declines moderated to 0.9%, after a 2.1% drop in the second quarter.
The marked pick up in activity in the Edinburgh market noted in the second quarter continued throughout the summer, particularly for properties priced in and around £1 million. This was reflected in a doubling of concluded missives between July and September compared to the same period last year.
But the rise in sales under offer was more modest at 16%. Prices remained stable in the third quarter and are down 0.3% year on year.
‘There has been an uplift in activity in Edinburgh this year, and a particular trend that has emerged has been the rise in cash buyers. In many cases these are individuals or families who have sold their house and are now renting,’ said Matthew Munro, partner at Knight Frank’s Scottish residential department.
‘This means they are ready to move quickly when new property comes onto the market. While these buyers may require mortgages, they are chain free, and often at an advantage over those who have another property to sell,’ he added.
This article was republished with permission from Property Wire.