Property prices in Scotland at their highest for two years despite slowing growth
Property prices in Scotland increased by just 0.1% in March but average prices are still at their highest level for two years, the latest index shows.
This took the average price of a home in Scotland to £173,335, the highest since May 2015, and the biggest cities of Edinburgh and Glasgow have recorded strong growth.
Overall a shortage of properties for sale at a time where there is increase demand from buyers in maintaining prices at a high level in some areas, according to the data from Your Move.
But the market has slowed in terms of prices and sales. Annual price growth was 1.8%, faster than the year on year rise in London and new peak prices were recorded in South Lanarkshire and the Highlands.
But growth has slowed. The 0.1% month on month rise was virtually flat compared with the 1.1% rise in values in February and annual growth is down from the 2.9% recorded in the same month.
The most recent transaction figures show sales volumes for the full year in 2016 were 1% lower than in 2015, the data also shows and the index report points out that the market has proved remarkably steady in the last year, barely registering the Brexit vote.
Prices have moved within a range of just 2.7% at £168,745 at their lowest last July, and £173,335 at their highest in March but that disguises significant differences across the key local authority areas that account for the lion’s share of the market in terms of sales volumes.
For example, annual price changes to March 2017 have ranged from 5.1% and 8% growth in Edinburgh and Glasgow, respectively, to falls of 4.1% and 3.7% in Fife and Aberdeenshire. Among the other local authorities, a couple of big sales meant the largest monthly rises were in Clackmannanshire, up 8.4% this month and 11.6% annually, as a result of the sale of its highest priced property at £885,000 for a year. The sale if a £1.1 million home on the Inveresk Estate pushed up growth to 4.5% in East Lothian.
On an annual basis, the biggest increase was in Argyll and Bute at 12.8%, again assisted by the purchase of high priced homes, five of which sold for more than £500,000 in Helensburgh, a 40 minute commute to Glasgow. Average prices in the area are now £167,922, making it the 12th most expensive area in Scotland.
The most expensive area remains Edinburgh, with average prices of £250,107, followed by East Renfrewshire at £243,365 and East Dunbartonshire at £242,450. The cheapest is North Ayrshire, which has also seen one of the biggest falls in prices this year with a decline of 5.1% while in West Lothian prices are down 7.1% and down 5.6% in Inverclyde.
The report says that neither of the big recent political developments in Scotland, the snap general election and the Scottish Parliament’s backing of a second independence referendum, in April and March respectively, are reflected in these figures.
It adds that the date for triggering Article 50 and formally beginning the Brexit process was known, but decisions to buy and sell are likely to have been made well before. Even with this foresight, there’s little evidence to suggest prices would be dramatically different.
‘A slowdown in growth doesn’t change the remarkable resilience of the Scottish housing market. Prices are now at their highest since the upset to the market caused by the introduction of the Land and Building Transaction Tax (LBTT) in 2015,’ said Christine Campbell, Your Move managing director in Scotland.
According to Alan Penman, business development manager for chartered surveyors Walker Fraser Steele, the market looks in strong shape despite sluggish growth. ‘While a few high value sales continue to distort average prices in a number of areas, the real engine driving steady growth in the Scottish market is the solid performance of property in its two biggest cities of Edinburgh and Glasgow,’ he added.