Scottish Housing Market Review: January - March 2021

Sales

National

Source: Registers of Scotland

Scottish Sales Performance: National

The recovery in housing market activity in the second half of 2020 strengthened further in Q1 2021, with Registers of Scotland statistics showing that there were 28,646 residential property sales registered across Scotland in Q1 2021, an annual increase of 55.7%. The recovery since restrictions on home moves were lifted in June 2020 has been fuelled by pent-up demand as well as the the temporary reduction in LBTT, which ended 31 March 2021. However, for 2020-21 as a whole, activity was down by 6.5% on 2019-20.

More timely statistics from Revenue Scotland on the number of residential LBTT returns submitted indicates the housing market is returning to more normal levels after the increased lower threshold to pay LBTT returned to its pre-pandemic level. Chart 1.2 plots the percentage difference between weekly residential LBTT returns in 2021 and 2020, and the average from 2016 to 2019 for the corresponding week. In March 2021, residential LBTT returns were 55.1% above the 2016-2019 average, while returns in April 2021 were 18.1% lower, as transactions were brought forward to benefit from the LBTT relief. However, in May 2021, returns were only 1.3% less than the 2016-2019 average for the same month.

Source: Revenue Scotland

Key Points

The housing market recovery strengthened in Q1 2021, with sales recorded by RoS increasing by an annual 55.7%, driven by pent-up demand and the temporary reduction in LBTT, which ended on 31 March 2021. However, for 2020-21 as a whole, sales fell by 6.5%.

More recent data using residential LBTT returns indicates that housing market activity could be stabilising at pre-pandemic levels, with LBTT returns in May 2021 only 1.3% lower than the 2016-2019 average.

Regional

Scottish Sales Performance: Regional

Registers of Scotland data shows that the strong growth in housing market activity in Q1 2021 was experienced across Scotland. The largest increase in residential property sales occurred in Edinburgh, Lothians and the Borders, where sales rose by an annual 64.4%. Sales in the Clyde Valley increased by the lowest amount in Scotland but this remains a sizeable increase in transactions, up by 49.1% on the same period last year.

Analysing the annual change using a rolling four quarters method, it can be seen that the reduction in transactions for the one year period to Q1 2021 relative to the year prior has been experienced in a broadly uniform manner across Scotland. The smallest decrease in sales on a rolling four quarter basis was in Aberdeen/shire & Moray by 3.0% and the largest decrease in sales was in the Clyde Valley by 8.5%.

A summary of residential property sales activity by Scottish region is included below. This contains the number of residential property sales registered in Q1 2021, the annual change, as well as the annual change in sales using a rolling four quarter period to Q1 2021. The latter is included to smooth out volatility in quarterly data.

Aberdeen/shire & Moray
Sales - Q1 2021 2,705
12 Month Change 61.2%
Annual change (rolling 4 quarters) -3.0%

A&B, Highland & Islands
Sales - Q1 2021 2,143
12 Month Change 57.5%
Annual change (rolling 4 quarters) -6.8%

Ayrshires & D&G
Sales - Q1 2021 2,555
12 Month Change 58.6%
Annual change (rolling 4 quarters) -5.4%

Clyde Valley
Sales - Q1 2021 9,470
12 Month Change 49.1%
Annual change (rolling 4 quarters) -8.5%

Edinburgh, Lothians & Borders
Sales - Q1 2021 6,165
12 Month Change 64.4%
Annual change (rolling 4 quarters) -6.6%

Forth Valley
Sales - Q1 2021 1,509
12 Month Change 52.7%
Annual change (rolling 4 quarters) -5.6%