Price growth in Scotland’s Country market hits 14-year high as pandemic inspires change

Prices in rural Scotland increased at the strongest rate since the global financial crisis during the second quarter, driven by both high demand and limited supply.

Average prices increased by 5.5% during the three months to June, the strongest quarterly performance since Q2 2007. Annual growth was 5.7%, which was the highest figure since Q4 2007.

Activity was strong at all price points and for all property types, with interest from domestic buyers and those from England looking to purchase both primary and secondary homes.

“It’s been an extraordinary period and I’ve never experienced anything like it. Everything we have for sale now is going to closing date bids within three to four weeks, from £275,000 cottages to multi-million-pound estates, that’s how fast the market is moving,” said Tom Stewart-Moore, head of Knight Frank’s rural business in Scotland.

Demand has been driven by those looking to change lifestyle, but the pandemic has also led to the greater adoption of home working and rural properties have benefitted from the loosening ties to major urban centres.

Exchanges were up 20% versus the five-year average excluding 2020 during Q2 in Scotland. Offers accepted in the same period were up 57%, viewings by 48% and new prospective buyers by 74%.

However, supply remains tight, with market appraisals for sale down 11% on the five-year average (excluding 2020). While the amount of properties for sale in Scotland increased during the second quarter, it has not been enough to keep up with demand.

There were 27 new prospective buyers for each new instruction in June. This is the highest level that the ratio, an indicator of demand versus supply, has been at in the 12-months since the market reopened in Scotland. Supply is expected to remain tight throughout the summer, which should support prices.

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