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News Release

Scottish house prices set to stay flat in 2017 with 1% growth in 2018

As Brexit dominates over the short-medium term


​Scotland, 2 November 2016 - JLL’s latest forecasts, released today, conclude that Brexit will dominate UK housing markets over the short to medium term but predicts that the market will remain reasonably strong and active despite the greater uncertainty and slower economy resulting from Brexit.

JLL is forecasting that Scotland’s house prices will remain flat next year with 1% growth in 2018. House price growth in Scotland is predicted to rise to 4.5% pa by 2021 as greater certainty returns to the UK following Brexit.

UK transaction levels are forecast to decline from around 1.22m this year to 1.08m next year, an 11% fall, as uncertainty causes some households to defer house purchase decisions. However, JLL predicts that the softer market conditions will encourage more first-time buyers to get onto the housing ladder, especially as interest rates will be so enticing.

Jason Hogg, Director Residential at JLL in Edinburgh, comments: “Somewhat against the grain, house builders in Scotland have enjoyed a reasonable, immediate post-Brexit sales environment benefitting from the Scottish Government’s Help to Buy Scheme and record low interest rates. Enquiries for new development opportunities to meet housing demand in the short / medium term remains strong. However, we acknowledge that economic uncertainty associated with whatever Brexit we end up with is harder to model on larger sites.

“What has been particularly encouraging is to see how certain housing markets within Scotland, particularly Edinburgh City Centre, have seen strong price growth and increased levels of demand on new build housing stock”.

JLL is concerned about the impact that Brexit will have on housing supply, both in Scotland and across the UK.

JLL welcomes fresh and new rhetoric from policymakers, but believes that it will be very difficult to even maintain current levels of house building given underlying conditions.

Jason Hogg continues: “Put simply, there are not enough homes being built in Scotland to satisfy demand. We know that the Scottish Government is actively seeking answers and it will be interesting to see whether policy initiatives target short-term supply improvements or look beyond the immediate horizon to create lasting, long-term solutions. Given the likely Brexit uncertainty over the next few years we believe that policymakers will be wisest to look long-term.”

 

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Notes to Editors

Download the report and access the interactive web tool here