According to new research by global real estate consultant Knight Frank, rising uncertainty surrounding Brexit and its potential impact on the economy tempered growth in Scottish country house prices over the first three months of 2019.
Knight Frank further reports values were unchanged compared with December 2018, though on an annual basis they remain 2.3% higher. The prime market in Scotland has outperformed the rest of the UK, where prime values fell 1.8% over the 12 months to March.
Annual growth in Scotland was led by modest increases across the central belt, in the north and in the Borders, according to our Prime Scotland index. More generally, rural locations within commuting distance of employment hubs have been the strongest performers.
Values have also been underpinned by a shortage of supply relative to demand, as well as the ripple effect of stronger performance in Scottish city markets. Our prime index for Edinburgh shows values have risen by 7.6% annually, making it one of the fastest growing cities in Europe by price.
The number of prime listings with a value above £500,000 outside of Scottish cities was 8% lower in the first three months of the year compared with the same period in 2018 and 23% lower than Q1 2017, an analysis of Rightmove data by Knight Frank shows.
Agents note that a lack of clarity politically has made some vendors more cautious about bringing properties to market, though well-presented homes that are priced to reflect market conditions continue to attract buyers.
Indeed, data from the Registers of Scotland covering the 12 months to January 2019, shows a 23% year-on-year increase in million pound-plus sales.
However, with Brexit leading the headlines and impacting on housing market sentiment, the prime market is driven primarily by needs based purchasers who are moving for work, schooling or because they require more space.
The relative value on offer in prime Scottish markets compared to the rest of the UK should drive demand in 2019. Average prices remain around 20% off the pre-financial crisis peak in 2007.