West Coast Residential Property Market Trends

There has been a significant upturn in demand and property prices in West Coast, Argyll, and the Islands, including outlying rural areas, coastal regions, and island destinations. The desirability of country living has surged post-COVID due to remote work opportunities and lifestyle preferences. This article examines the recent trends in the residential property market in these areas, highlighting both the positive and negative impacts.

Demand and Price Surges: The demand for properties in these areas has skyrocketed, leading to a meteoric rise in prices, particularly in locations with waterside positions and uninterrupted views. Celebrities and individuals from the south of England and the central belt are among those moving to these areas, either as primary residences or second homes. Notably, properties have been sold for up to 100% over the asking price, especially on islands like Islay, Coll, and Tiree.

Factors Driving Price Rises: The combination of high demand and low supply in sparsely populated, low-density areas have fuelled the price hikes. While the Additional Dwelling Tax has had some impact, it's more likely to affect the lower end of the market, with cash-rich buyers less affected. Local businesses, including pubs and restaurants, buying properties to provide accommodation for staff, have further intensified demand.

Rental Market Impact: The rental market has also been impacted, with rents increasing at a similarly high rate due to the scarcity of rental properties. This situation has been exacerbated by properties being rented out for holiday accommodation, reducing the supply of long-term rentals.

Positive and Negative Impacts: The surge in house prices has brought both positive and negative effects. On the positive side, cash-rich individuals contribute to the local economy, and sellers benefit from higher prices. However, it also forces locals out of the area and makes it challenging for first-time buyers to enter the market, potentially leading to a transient population that negatively impacts the local economy.

Potential Solutions: Addressing the high price rises may require increased new build housing and relaxation of planning laws in these areas to boost supply.

Future Outlook: While the residential property market in these areas has seen a slowdown compared to the peak during and immediately post-COVID, there is still evidence of steady demand. Optimistically, the market is expected to continue performing well, particularly for unique waterfront and coastal properties.