Scottish Housing Market Review Q1 2024

1. Sales

1.1. Scottish Sales Performance: National

Source: Registers of Scotland

After a period of considerable volatility due to the impact of the Covid-19 pandemic, as well as measures such as the temporary reduction in Land and Buildings Transaction Tax, the volume of transactions has been trending down due to the impact of the cost-of-living crisis, in particular the increase in interest rates (see Section 6). Registers of Scotland statistics show that there were 25,106 residential property sales registered across Scotland in Q4 2023 – relative to Q4 2022 this was a decrease of 12.0% (3,413); compared to the pre-pandemic position in Q4 2019 this was a decrease of 13.4% (3,875). The annual change in transactions was negative for the ninth consecutive quarter in Q4 2023.

Chart 1.2, which uses Revenue Scotland data to plot the percentage difference between monthly residential LBTT returns over the period 2020 to 2024 relative to the corresponding month in 2019 (with 2019 chosen as the baseline to reflect pre-Covid market conditions), provides a more fine-grained picture of recent trends. While it can be seen that for much of 2022, transactions closely tracked their levels in 2019, the number of transactions since December 2022 has generally been significantly lower than before the pandemic. While this remains the case for the most recent 3-month period ending February 2024, with transactions down by 11.7% relative to the 3 month-period ending February 2020, immediately prior to the pandemic, transactions were only down by 2.3% compared to the 3 months ending February 2023, which may suggest that the rate at which transactions are falling is beginning to moderate.

Source: Revenue Scotland

1.2. Scottish Sales Performance: Local Authorities

Table 1.1 sets out the level and annual change in quarterly transactions by local authority. The volume of transactions at local authority level can fluctuate significantly – particularly in smaller local authorities like Shetland Islands and Orkney Islands – and to remove some of this volatility, the change in transactions in the last 4 quarters compared to the preceding 4 quarters is also presented.

Table 1.1 shows that housing market activity has declined at both the national and local level throughout 2023. Only South Ayrshire had more sales in the year to Q4 2023 than the corresponding period a year earlier and this was modest growth at 0.1%. Aberdeenshire was the area that recorded the largest fall, with the number of transactions falling by 19.7%.

Source: Registers of Scotland