Scottish Housing Market Review – Q4 2021

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), data for Q3 2021 suggests housing market activity is starting to stabilise, with Registers of Scotland statistics showing that there were 31,663 residential property sales registered across Scotland. Whilst this was an annual increase of 53.9%, this can be explained by the reduced level of transactions in Q3 2020, when housing market activity began to recover from the lockdown in Q2 2020. Relative to Q3 2019, transactions in Q3 2021 were up by 10.2%, while comparing to the 4 year average for Q3 (2016 – 2019), transactions were up by 12.0%.

More timely statistics from Revenue Scotland on the number of residential LBTT returns submitted confirm that the housing market is returning to more normal levels. Chart 1.2 plots the percentage difference between weekly residential LBTT returns in 2020 and 2021, and the average from 2016 to 2019 for the corresponding week. Following a surge and then dip in transactions around 31 March 2021 when the temporary reduction in LBTT ended, weekly transactions have generally been somewhat higher than their 2016-19 average. For example, in November 2021, while LBTT returns were down by an annual 15.6% due to the high level of transactions recorded in November 2020, they were 10.7% above the 2016 – 2019 average for November.

Source: Revenue Scotland

Scottish Sales Performance: Regional

Registers of Scotland data shows that the strong annual growth in housing market activity in Q3 2021 (which was boosted by the low base in Q3 2020, as discussed above) was experienced across the different regions of Scotland. The largest increase in residential property sales occurred in Aberdeen/shire and Moray, where sales rose by an annual 74.5%. Sales in the Forth Valley increased by the lowest amount in Scotland but this remains a sizeable increase in transactions, up by 40.6% on the same period last year.

Analysing the annual change using a rolling four quarters method, it can be seen that the increase in transactions for the one year period to Q3 2021 relative to the year prior has also been experienced in a broadly uniform manner across Scotland. The largest increase in sales on a rolling four quarter basis was also in Aberdeen/shire and Moray by 71.1% and the lowest increase in sales was in the Forth Valley by 50.9%.

A summary of residential property sales activity by Scottish region is included below. This contains the number of residential property sales registered in Q3 2021, the annual change, as well as the annual change in sales using a rolling four quarter period to Q3 2021. The latter is included to smooth out volatility in quarterly data.

Source: Registers of Scotland