Average house prices in Scotland up by 0.6% in May, with growth led by Glasgow

Average house prices in Scotland increased by 0.6% in May 2017 to £175,070 and are up 3% year on year, the latest index data shows.

But price growth is slightly slower than in England and Wales where it was 4.3% in May, according to the figures from the Your Move report.

The market in Scotland is being driven by demand from first time buyers and weak supply and the average price is being driven by activity in Glasgow which accounted for 60% of the price increases in May and saw prices rise 10.9% annually to a new peak average price of £151,622.

Despite a slight month on month slowdown, across Scotland some 17 of the 32 local authority areas still saw prices rise in the month, compared with 21 in March. East Lothian saw the biggest increase in the month at 5.4%, boosted by the sale of the second most expensive property in Scotland this year, while East Ayrshire showed the strongest annual performance, up 13.2%.

In Aberdeenshire, where the market has been hit by falls in oil prices, the market is recovering. Prices have risen from an average £260,000 to £280,000, not far below the £290,000 previously recorded. And Edinburgh, which has led the growth, saw prices fall by 0.3% month on month.

One of the biggest monthly falls was in the Borders, down 5.2%, and prices here are now 1.7% below a year ago. Prices all fell by 3.9% in East Renfrewshire, by by 2.9% in East Dunbartonshire, by 1.8% in Dumfries and Galloway and were flat in Fife, month on month.

‘After a surge in April, Scotland has returned to its long term pattern of modest, but fairly steady price rises,’ said Christine Campbell, Your Move managing director in Scotland, but she added that this hides wildly different regional values and activity.

According to Alan Penman, business development manager for chartered surveyors Walker Fraser Steele, there also remains a fundamental imbalance in supply and demand. ‘The demand from first time buyers is encouraging; we need to make sure we have the property to meet it,’ he said.