Scottish Housing Market Review: Q3 2022

1. Sales

National

Source: Registers of Scotland

Scottish Sales Performance: National

Following the surge in transactions after home move restrictions were lifted in late June 2020, which was fuelled by pent-up demand as well as the temporary reduction in LBTT (which ended on 31 March 2021), followed by a fall as these impacts came to an end, data for Q2 2022 suggests housing market activity is returning to pre-pandemic levels, with Registers of Scotland statistics showing that there were 25,331 residential property sales registered across Scotland. Whilst this was an annual decrease of 3.5%, relative to the average for Q2 (2016 - 2019), transactions fell by a more modest 1.7%.

More timely statistics from Revenue Scotland on the number of residential LBTT returns submitted reinforces that housing market activity is returning to pre-pandemic levels. Chart 1.2 plots the percentage difference between monthly residential LBTT returns in 2020, 2021 and 2022 relative to 2019 for the corresponding month, with 2019 reflecting pre-Covid market conditions. Analysing the first eight months of 2022 relative to the same period in 2019, it can be seen that transactions were 0.7% higher in 2022.

Source: Revenue Scotland

Scottish Sales Performance: Regional

Registers of Scotland data shows that housing market activity in Q2 2022 relative to Q2 2021 varied quite considerably across the different regions of Scotland. There was a large increase in residential property sales in Aberdeen/shire and Moray, where sales increased by an annual 8.2%. However, sales in Tayside and Fife decreased the most in percentage terms, down by 8.9% on the same period last year.

Analysing the annual change using a rolling four quarters method, it can be seen that the decrease in transactions at the national level for the one year period to Q2 2022 relative to the year prior has also been experienced across Scotland, with the exception of Aberdeen/shire and Moray.

A summary of residential property sales activity by Scottish region is outlined in Table 1.1 below. This contains the number of residential property sales registered in Q2 2022, the annual change, as well as the annual change in sales using a rolling four quarter period to Q2 2022. The latter is included to smooth out volatility in quarterly data.

Table 1.1 Regional residential transactions

Aberdeen/shire & Moray

Sales – Q2 2022 2,957

12 Month Change 8.2%

Annual change (rolling 4 quarters) 11.2%

Edinburgh, Lothians & Borders

Sales – Q2 2022 5,093

12 Month Change 0.5%

Annual change (rolling

4 quarters) -2.8%

Argyll & Bute, Highland & Islands

Sales – Q2 2022 1,677

12 Month Change -6.6%

Annual change (rolling

4 quarters) -2.0%

Forth Valley

Sales – Q2 2022 1,302

12 Month Change -0.4%

Annual change (rolling 4

quarters) -4.9%

Ayrshires, Dumfries & Galloway

Sales – Q2 2022 2,323

12 Month Change -5.9%

Annual change (rolling

4 quarters) -4.7%

Tayside & Fife

Sales – Q2 2022 3,628

12 Month Change -8.9%

Annual change (rolling

4 quarters) -4.7%

Clyde Valley

Sales – Q2 2022 8,331

12 Month Change -6.1%

Annual change (rolling

4 quarters) -4.4%

Scotland

Sales – Q2 2022 25,311

12 Month Change -3.5%

Annual change (rolling

4 quarters) -2.5%

Source: Registers of Scotland