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The pretty Scottish port of Oban describes itself as “a world away from London”. And it certainly is – in more senses than one. In addition to being 500 miles north of the UK capital, its homes could scarcely be more different.
While central London is densely packed with houses and apartments, Oban has a broad choice for property buyers thanks to its location on the west coast of Scotland. West of Oban are the Hebrides, consisting of 25 inhabited (and many more uninhabited) islands with populations ranging from one to 7,000; while to the east and north are the Highlands.
Oban itself is a small town built on a crescent of hills around a bay. There are 8,200 permanent residents, a figure that triples during the summer holiday season. Cafés and family-run B&Bs thrive thanks to tourists bound for the islands on ferries from the town, or on flights to the isles of Coll, Colonsay, Tiree and Islay.
Most houses inside Oban are small and have an average price of just £163,000, according to website Zoopla. But within a 20-mile radius, properties for sale can be far more substantial, including farmhouses, mansions, mainland estates and entire islands.
Prices are a world away from London too. While many estate agents in the capital regard only £2m-plus properties as “prime”, high-end around Oban begins at £700,000 and, within that 20-mile radius, there are at present only two open-market homes priced at more than £1m.
“In recent years, the high-end has been oversupplied,” says Patrick Paton of Smiths Gore estate agency. “There’s been a price correction with at least 30 per cent off the high point [of 2007] although some recovery has been achieved in recent months.” Paton adds that several other £1m-plus homes are available “off-market” – known to certain estate agents, that is, but not advertised because sellers want to remain discreet should their homes not find buyers.
Sales are sluggish, however. While most of the UK may have seen some recovery since the start of 2013, average prices in Argyll and Bute (Oban’s wider district) have fallen 11 per cent in the year up to July, according to the Registers of Scotland. “Most of the fall occurred in the last quarter of 2012 and the first quarter of 2013,” says Gwilym Pryce, professor of urban studies at the University of Glasgow. “Recent growth in sales is not reflected.”
According to Michael Jones of Knight Frank, the properties that sell the fastest are those that appeal to buyers wishing to take advantage of the good sailing on offer. “Whether they’re cottages for second homes or larger estates, having scenic views and particularly access to water are driving factors,” he says.
Knight Frank is marketing Eilean Righ, a 260-acre private island on Loch Craignish, south of Oban. It has two houses with a total of seven bedrooms, a 5,000 sq ft helicopter hangar, two slipways, a jetty and moorings, plus (not easily found in this area) high-speed broadband, for £3m. On the mainland north of Oban is the town of Duror where Knight Frank is selling a 194-acre coastal estate, which includes an eight-bedroom farmhouse and two one-bedroom cottages with a trout pond and woodland for £1.25m.
For those wanting smaller grounds but some revenue, there are five farm cottages for sale on the Isle of Mull, 14 miles from Oban, for £760,000 with Smiths Gore; they generate income of £50,000 per year.
Within Oban, a 1930s four-bedroom colonial-style villa, with a sea-facing terrace and a one-bedroom annexe, is on sale through Dawsons for £525,000. While properties in the Highlands are popular with overseas buyers, Oban and nearby areas are more parochial, although there have been a handful of farm sales in the past two years to Danish and Irish buyers and house sales to Germans and Americans.
But with 15 per cent of the local housing stock classified as second homes, the majority of high-end purchasers are either professionals under 50 with principal bases in Edinburgh and Glasgow, or prospective retirees seeking a lifestyle change by tapping into tourism, which is Oban’s chief industry. “The opportunity for rural bed-and-breakfasts or cottages that can be let for self-catering broadens the appeal of a property,” says Jones.
The area is 97 miles from Glasgow and 122 miles from Edinburgh. It takes between two and three hours to drive to either city or their respective airports, while the direct rail journey between Oban and Glasgow takes almost three-and-a-half hours. Even so, Oban and its rural hinterland are regarded as fairly accessible weekend destinations by Scottish standards and agents believe this reputation will eventually be key to the local housing market’s recovery.
Although analysts expect house prices in Oban to rise slightly this year, uncertainty over demand remains. Some believe that buyers will wait until next September when the Scottish government reveals details of a land tax to replace today’s UK-wide stamp duty.
London’s housing market took a 2012 stamp duty rise in its stride and has boomed ever since. Agents in Oban hope their area will respond similarly to the new tax.
● There were only two minor crimes reported in Oban in November 2013
● Nine per cent of Oban’s residents speak Gaelic (compared with under two per cent across all of Scotland)
● In Scotland, sellers must give would-be buyers a Home Report, which includes survey findings
● Scotland’s referendum on independence takes place on September 18 this year
What you can buy for . . .
£500,000: A five-bedroom modern house overlooking Oban town
£1m: A lochside house with about 20 acres of land
£3m: A small island west of Oban