Families from south of the Border trying to offset the VAT rise in private school fees are fuelling top-end property sales in Scotland, industry chiefs have revealed.
An analysis of the seven-figure sales in the country by Savills, shows 466 residential transactions reaching sums in excess of £1million were recorded in 2024 compared to 454 the year before.
Experts say the VAT change and demand for well-maintained country homes plus strong price growth have driven sales despite ‘political and taxation challenges’.
Fife, Stirlingshire and Perthshire recorded most of the top end sales with 61 deals completed with Elie, Bridge of Allan and Gleneagles and Dunblane seeing most of the action.
Greater Glasgow recorded 44 sale worth at least £1million with Dowanhill and the Park District in the city’s west end remaining steady with Bearsden and Lenzie performing well.
In Edinburgh, demand for family homes fuelled a 13 per cent rise in million-pound transactions with Grange, Morningside and Merchiston the top areas.
Waterfront properties across the country also commanded seven-figure sums while there was a dip in the top sales in the Highlands which was credited to ‘shortage of quality homes’ to meet the demand.
Head of residential sales at Savills, Cameron Ewer, said analysis of the buyer profile showed that 75 per cent of those who acquired million-pound properties already lived in Scotland with others coming from London and the South East, Austria, Australia, USA, Singapore and Hong Kong.
A total of 466 residential transactions reaching sums in excess of £1million were recorded in 2024
This detached villa in Hermitage Drive in Edinburgh’s Morningside sold after being placed on the market for offers over £4 million
He added: ‘The VAT change on private school fees is impacting property buying decisions.
‘Buyers from London and the south are considering moving to Scotland to purchase prime properties at lower costs, enabling them to allocate more funds towards private school fees.
‘Meanwhile, other families within Scotland are choosing prime properties near high-quality state education over private schooling. This trend is reflected in the increase in million-pound sales in key prime hotspots.
‘Demand for country houses, particularly in areas such as St Andrews and Gleneagles remains strong but running costs like maintenance and heating are becoming significant factors in purchases of larger country houses everywhere, even at the top end of the market.’
Chancellor Rachel Reeves announced last year that VAT would be charged on private school fees from January 1 this year, with the relief private schools receive on business rates also scrapped from April.
Labour said schools can choose whether or not to pass on the cost to parents and the move will raise £1.6billion to recruit 6,500 state school teachers.
But critics say the extra cost of educating displaced pupils who are pulled out of private schools by cash-strapped parents due to the increased fees could be higher.
The Independent Schools Council (ISC), which represents most fee-paying schools, voted in favour of suing the government over the policy last November.
The body will claim the Government’s policy is discriminatory, including against children with special educational needs and disabilities.
It has instructed leading barrister Lord Pannick, KC, who represented Boris Johnson during the Partygate inquiry, to fight its case.
The ISC is hoping for a judicial review on the grounds that the move breaches articles of the European Convention on Human Rights.
Faisal Choudhry, head of residential research in Scotland, said that the level of taxation in Scotland, changes to the non-doms tax status and inheritance tax were potential risks but added: ‘Despite these challenges, Scotland’s million-pound market will continue to be underpinned by demand for family homes in commutable areas and country homes with high specification within reach of major cities.
‘Setting realistic asking prices will be essential for sellers in the year ahead.’
Savills predict price growth in Scotland will continue at healthy levels in the next few years, elevating more properties into the seven-figure category.
