New-build sector driving prosperity in ‘red hot’ Scottish housing market

“It’s hardly coincidental that the wider Scottish market has performed so strongly, given the fact that it has seen some of the highest levels of new-build market activity, not only topping the table regionally by some margin but also accounting for 9 of the 10 strongest new-build markets at local authority level”
– Daniel Norman – APRAO

The latest industry analysis by property development appraisal software, APRAO, has revealed that Scotland is leading the way when it comes to new-build homebuyer market activity.

APRAO analysed residential sales volumes over the last 12 months, looking at what proportion of these purchases have come via the new-build sector and where across the UK is home to the highest level of new-build market activity.

The latest Gov data shows that the new-build sector is leading the charge when it comes to current house price performance, with the average price of a new-build home up 17% in the last year versus a drop of 1.8% in the average price of an existing home.

However, while new-build property values are soaring, the analysis by APRAO shows that just 4% of all homes sold in the last year across Britain have been new-builds.

Perhaps surprisingly, London is home to the lowest level of market activity, where the 1,066 new homes sold in the last 12 months equate to just 2% of total market transactions.

In contrast, across Scotland, new-build purchases have accounted for 11% of all transactions, with just the East Midlands coming close at 5%.

When breaking the market down at the local authority level, the dominance of the Scottish new-build market is also clear. East Lothian has seen the highest level of new-build market activity over the last year, with 29% of all property purchases being new homes.

In fact, Scotland accounts for the top nine hottest spots for current new-build market activity, with Midlothian (27%), West Lothian (20%), East Renfrewshire (16%), Perth and Kinross (16%), Renfrewshire (15%), South Lanarkshire (14%) and Moray (14%) also making the top 10.

Outside of Scotland, the Forest of Dean ranks as the hottest new-build market at present, with 14% of all market activity coming via new-build buyers, the highest proportion in England and Wales.

CEO of APRAO, Daniel Norman, commented: “Over the last year, higher mortgage rates have led to a drop in buyer activity and a reduction in property values across the UK.

“However, Scotland has bucked the trend, leading the rest of the UK both with regard to the monthly and annual rates of house price growth seen.

“At the same time, the new-build sector has posted a far superior performance when compared to the existing market and has arguably kept the market as a whole afloat during a difficult period.

“So it’s hardly coincidental that the wider Scottish market has performed so strongly, given the fact that it has seen some of the highest levels of new-build market activity, not only topping the table regionally by some margin but also accounting for 9 of the 10 strongest new-build markets at local authority level.”