When it comes to being a centre of commerce, having runaway house prices and a steady stream of foreign buyers, London has a rival: Aberdeen. According to data from the Nationwide Building Society, house prices in and around Aberdeen have doubled in the past ten years. This is an increase that is only matched by the fashionable London boroughs of Islington and Westminster.
Scotland’s third city is currently a melting pot of first-time buyers willing to pay above valuation levels, interest from workers moving to the area, investors trying to get in on the act and a lack of homes for sale. All these factors push prices up and questions the belief that the London property market is unique.
First-time buyers in the city can expect to pay £140,000 for a one-bedroom flat, or up to £500,000 for something bigger. Competition for homes means that many buyers are paying 5-10% over the valuation. The reason for this active property market is clear; North Sea oil. It is driving the local economy with big companies investing heavily in the area.
The area was not immune to the financial crisis, as banks tightened lending in 2008, but Glasgow and Edinburgh suffered more. Figures published by the University of Aberdeen show a 25% increase in the volume of sales in the second quarter of 2014, compared with the same three months of 2011. Prices were up 5.5% in the city over the same period.
As in London, Aberdeen could potentially suffer from an overheated property market where housing stock goes up in value too quickly, ultimately forcing a sharp drop in prices. However, local estate agents are confident that the present of North Sea Oil company infrastructure will protect the region from that and prices will continue to rise at a sustainable rate.
Sources: bbc.co.uk, nationwide.co.uk