New build living shows its resilience in Scotland’s 20-minute neighbourhoods
Latest research from Savills reveals that, in the face of continuing challenging economic headwinds, the sales performance of new build developments in the ’20 minute neighbourhoods’ of Scotland’s largest cities remains strong.
Such locations are being promoted as part of Scottish government’s national planning policy (NPF4) which was adopted on 13th February. The policy takes a ‘brown-field first’ approach which favours the use of urban city sites rather than greenfield.
Savills latest analysis of properties at the end of 2022 across Glasgow’s 23 new build residential developments showed a rise in demand. The average sales rate was 3.4 per calendar month, compared with 2.5 the previous year. There were currently only five developments on the market in the city with a current average price of over £350,000. Consequently, the overall average price of the 1,412 properties examined here fell to £295,676 with an average price per square foot of £296. This was the lowest average price in the last four years when typically 10 prime developments were marketing at any given time. However, more sites are due to come on stream this spring and this is likely to lead to more competitive pricing.
Sales rates improved slightly in Edinburgh too: whilst demand is strong in the capital, new build supply remains constrained, with no significant increase in the number of available properties at the end of 2022 compared with the previous year. The ongoing supply/demand imbalance had led to the average price of properties analysed increasing by 10% to £495,629 with the average price per square foot sitting at £449 at the end of 2022 with a steady average sales rate of 1.5 per calendar month.
Claire Wright of Savills Research said: “Savills reveals more buyers are reserving properties within locations where home, work and local amenities can be reached within a twenty-minute walk or cycle or by public transport. This has been the case since the end of lockdown and the subsequent return to the workplace.
“The uptick in sales is also being driven by the quest for more energy efficient homes: Savills research reveals an average 27% saving on core energy costs for new builds in Scotland* compared to second hand properties, and also that more buyers are placing importance of the energy efficiency of properties.”
Looking ahead, there is no doubt that economic uncertainty and a tougher lending environment will result in reduced new build sales activity and prices in 2023 across the UK, especially in those markets which are most exposed to a higher cost of borrowing. Against the backdrop of a price sensitive market, incentives are key to maintaining sales rates.
However, we anticipate the residential markets in Edinburgh and Glasgow to remain strong compared to the overall UK market over the next five years. Their comparatively robust local economies and the value gap compared to other UK cities point to greater capacity for growth.
*registering an EPC between 2018-2022 H1