Land Acquisitions and Constructions Required to Meet Huge Shortage of Homes

Land Acquisitions

There is a continuous need to build 23,000 new homes in Scotland, and the figure can be around 25,000 (extra new homes) to fulfil the backlog scarcity created by last year when only 18,000 homes were constructed. 

Councils can help promote land development and acquisitions of unused farmlands or low-grade industry land. For example, builders acquire land before construction, as preparation is required for laying bricks and building homes. However, before a project completes, the land value rises, and the builders get a chance to profit from the sale of homes and the increase in the value of the land. So, one can buy undeveloped agricultural lands to profit in future.

Price Gain Continues

Currently, the price in Edinburgh continues to rise faster than in other areas of Scotland. The average selling price of homes in 2018 was 4.9 per cent higher (to £242,000) compared to 2017. 

Fluctuations in the price with a slow increase in the last quarter led to the overall growth in price, while the number of homes sold in 2018 was less as compared to 2017 by 3.4 per cent as per ESPC data. 

The officials expect an increase in the number of properties in the year and recovery from last year's deficit, which can make it easy for first-time buyers to acquire property in the coming years.

Edinburgh Rates Continue to Grow

A drop in the sale of homes was reported in Edinburgh in Q2 in 2018, even as the sale continues to grow. The highest sales growth was reported in Edinburgh's North East property.  

The chief executives at ESPC said 2018 was a seller market and the first time the market faced stiff competition as there was strong demand in the city for homes amidst a shortage in supply. 

• Sales in the third quarter in Scotland increased 10 per cent despite Brexit uncertainties, and the market remained strong in Aberdeenshire and Stirlingshire, where the sale grew 100 per cent, and in Moray, the sales were up 55 per cent and Perthshire by 33 per cent.

• The markets in these regions did grow at a time when other regions were growing. The buyers are not aiming to get immediate appreciation in rates, but these regions are in high demand, principally around Edinburgh, St Andrews, and Glasgow. 

• In the medium term, buyers believe the house price will grow at the rate of 5 to 10 per cent, and in the long term, the growth can be in the range of 15 to 20 per cent. 

• The region remained unaffected by the economic uncertainties of 2008, as it attracts buyers due to the relative affordability of the property and attractive lifestyle. 

More than 50 per cent of the home sale made in the last year was below the £145,000 threshold, the value from which the tax starts to apply. However, at least 8 per cent was in the price range above £325,000, which accounts for 55 per cent of the Land and Buildings Transaction Tax revenue for the Land acquisitions.

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