The Scottish new homes sector remains price sensitive
Whilst demand for realistically priced new build homes that will be ‘move-in ready’ by the end of 2020 are sharing in the remarkable post-lockdown recovery being felt in Scotland’s housing market, those with longer completion times may require financial incentives to secure sales this autumn particularly in the prime city markets above £250,000, as the economy weakens, according to Savills.
Carole Mackie, Savills head of residential development Sales in Scotland “There’s no doubt that the number of agreed sales have increased since lockdown, supported by various government incentives. However competitive pricing by housebuilders, in line with locations across all price bands, will be critical to maximising demand, particularly as we face a harsher winter economically with the ending of the furlough scheme and returning uncertainty around Brexit.”
Savills research reveals buyers have been reassessing their needs during the pandemic and are looking to move quickly, rather than reserving a property with a long lead time. They are seeking additional space, often for homeworking, in suburban and accessible country locations. The quest for more room inside and out has seen the proportion of Savills upsizing buyers of new homes jump from 34 per cent of the market in 2017 to 50 per cent in the first half of this year.
According to Savills, buyers and developers alike are also embracing the European concept of the ‘15 minute city’ recognizing the benefits of living and investing in city neighborhoods where it is possible to avoid unnecessary car journeys by walking and cycling around the city, with schools, offices, public parks and the choice of artisan and high street shopping close to the front door.
Carole Mackie said: “Edinburgh and Glasgow have characteristics of the 15 minute city and many developers are already building with this trend in mind: increasingly new homes in our cities are being designed with home study areas, private outdoor space and fast broadband connections, all of which provide an ideal environment for blended home working going forward.”
Funding in an uncertain economy is a common concern for all buyers, but particularly those on the early steps of the property ladder. According to Carole Mackie: “In the face of increased mortgage applications and an uncertain economy, banks are favouring lower-risk lending. Indeed the number of 90 per cent loan to value mortgage products on the market reduced by 92 per cent between March and August 2020. This is impacting first time buyers rather than equity-rich homeowners.
“There is a real opportunity for developers to attract buyers who have failed to secure a second hand property due to competitive bidding in many of Scotland’s fast moving hotspots. First time buyers and second steppers are taking advantage of the fixed prices and developers’ incentives that are available in the new build sector.”