HOUSE sales are likely to fall by 25% across Scotland and the UK this year, according to a new report which confirms the cooling of the property market.
In a generally downbeat assessment of property and land sales, Savills will this week say the land market north of the border will continue to outperform the UK, although Scotland is not expected to escape unscathed.
“Demand for new homes is hard
est hit by these changes in market conditions, which in turn directly affect land values,” said partner Andrew Perratt.
He forecast that Scottish greenfield land values will stay ahead of the average for the UK this year but this may mean zero growth in 2008.
“Primarily, it will be strong demand for family housing on the outskirts of Edinburgh and other Scottish cities combined with site scarcity that will support land values,” he will tell the firm’s annual Scottish land development seminar.
Director Raymond Dunn is expected to say the credit crunch, the Northern Rock crisis and a tightening of lending criteria led to a sharp erosion of confidence and, under the circumstances, Savills anticipates a 25% decline in housing and land transactions across the UK. A similar pattern is expected in Scotland.
Speaking ahead of the seminar, Dunn said he expected land transactions to slow quickly. “The first thing a builder does if he sees a downturn is stop buying land. Builders are preserving cash.”
He said although Scotland does not experience the same peaks and troughs of the cycle as the south of England, it would suffer a similar pattern of falling values and transactions. “We are not going to escape unscathed. The market is turning down very quickly in Scotland.”
Savills’ development specialist Peter Allen urged developers to reconsider the creation of more terraced and semi-detached housing.
On a more positive note, he says Scottish land has outperformed the UK market for years with growth rates of nearly 40% in 2007 “and will doubtless fare better than other UK markets in the next two years”.
The full article contains 345 words and appears in Scotland On Sunday newspaper.
