Scotland’s property market is being driven by motivated house-hunters – with almost half of all purchases from cash buyers, according to property consultancy Galbraith.
The demand for homes has led to an average annual price rise of 12.5% with sales increasing 14.6% compared with pre-pandemic levels, according to the firm’s sales data for the first half of 2021, with the most sought-after regions being Moray, Perthshire, Dumfries and Galloway and the Scottish Borders.
The research shows pockets of intense competition for the most attractive properties, fuelled by the demand for more space and a better work-life balance. The easy availability of mortgages and the current very low interest rates have boosted the market further.
Galbraith has over 4,500 active buyers and, of these, 44.6% are registered as cash buyers who already have funds in place.
Generally, cash-buy offers sit slightly lower than a property could achieve on the open market, but for sellers keen to move – and able to absorb a slight financial loss – it’s often a preferred option. Sales are often completed faster, too – good news for sellers keen to move.
𝗦𝘁𝗿𝗮𝗹𝗼𝗰𝗵 𝗛𝗼𝘂𝘀𝗲 𝗘𝘀𝘁𝗮𝘁𝗲 | beautiful country house with around 244 acres, walled garden & private chapel 👇https://t.co/RsdsD1ACR9
For more information, please contact our @Galbraith_ABD office;
☎ 01224 860 710
✉ aberdeen@galbraithgroup.com#Galbraith pic.twitter.com/wZ4VlCmI9I— Galbraith (@Galbraith_Group) August 24, 2021
Simon Brown, head of residential agency for Galbraith, said: “The market is characterised by very strong demand in most parts of the country, with intense competition between buyers for the most attractive properties and many homes being sold at a closing date.”
Kevin Maley, head of agency, Strutt & Parker, agrees saying: “The lack of supply has been fuelled by many homeowners who are keen to move, but are reluctant to come to the market until they identify a suitable property.
“The lack of available stock compounds the issue and we are seeing a number of highly competitive closing dates and properties selling well in excess of marketed price.”
Closing date competition
Cash purchases are most common among property businesses looking to snap up flats and smaller properties to add to rental portfolios – and with the rental market looking livelier in the last few months, this kind of cash-buy activity is to be expected.
However, Galbraith cash buyers are often looking at higher-end properties and in fact, for several years Scotland now has bucked the UK trend and attracted cash buyers for properties over costing well over £500,000.
#PropertyoftheDay Raitts House, @struttsscotland, is a family home with period features. It is set the village of Lynchat, home to Raitts Cave, an Iron Age underground chamber excavated in 1835 from which the house takes its name. 🏡
Take a virtual tour: https://t.co/g6tknPj9uC pic.twitter.com/T5U0FoT22S— Strutt & Parker (@struttandparker) August 20, 2021
The difference now is that buyers are turning their attention beyond the Edinburgh and south-west region of Scotland, and heading north in their search for luxury properties – and with some stunning properties around, demand is high.
Mr Brown said: “In recent weeks the supply of property coming to the market has been restricted, partly due to the traditional dip in transactions over the summer holiday period. We expect stock to increase again in the autumn.”
Cash buyers who have taken the leap of faith and decided to sell, often find themselves having a bit of an edge over those they may be competing with
However, between then and now, cash buyers are ready and willing to get the ball rolling, free from the need to sell a current property or find a mortgage – a factor that attracts those ready to invest and certain on gaining a decent return for a quick purchase.
Mr Maley said: “The buoyant property market conditions are well documented, and buyers have read the headlines about the huge demand. Most buyers appreciate that in this market, it is all about being in a position to proceed quickly.
“Cash buyers who have taken the leap of faith and decided to sell, often find themselves having a bit of an edge over those they may be competing with.”
Although cash buyers can inject some much-needed life into the market, it does leave some at a disadvantage.
Mr Maley adds: “Unfortunately for many, if you wait to find a property before marketing your own, the chances are the house will have sold by the time you secure an offer.”
Regional trends this quarter
Moray
Despite the increase in interest in cash buys, sales here are up by 77% compared with the pre-pandemic level. Popular properties are modern dwellings or recently refurbished, with one recently selling for 31.5% more than the price it achieved five years ago. It means that properties such as St. Ronans in Forres, on the market for o/o £725,000, could potentially fetch prices just shy of £1m.
Aberdeen
Prices are relatively high in the £250,000-£350,000 price band – with large premiums being paid for attractive, mainly detached homes, in a rural location and those with land. Norton House in Aboyne ticks many of the boxes but with a higher price tag.
Edinburgh
Prices in Edinburgh are at a 10-year high due to limited supply despite demand across all price bands.
For the full breakdown of regions go to galbraithgroup.com