Scottish house prices saw solid growth during 2016, latest data shows
Average house prices in Scotland increased by 0.2% in December 2016 and sales volumes reached their highest level for nine years, the latest index shows.
Year on year prices are now up by 2.2% to an average of £172,204 but while growth is ahead of the 2.1% annual rise for Wales and 1.3% in London, Scotland is still behind England, according to the Your Move index.
The Shetland Islands saw the biggest price growth in December at 10.9% and East Renfrewshire finished 2016 with the top growth of 11.5%, overtaking Edinburgh. Only Aberdeen saw prices fall with an annual decline of 4%.
Overall the index report says that the market in Scotland has largely seen steady growth since the spike in anticipation of the introduction of the Land and Buildings Transaction Tax in April 2015 and the subsequent fall in prices.
But Scotland has largely escaped the price drops seen at the top of the market in England and lower priced property has outperformed the top of the market growing 1.9%. The rise is supported by solid increases in areas such as West Dunbartonshire, up 7.1%, and Clackmannanshire up 6.1%.
The cheapest three areas, however, have all seen small dips in value over the last year with Na h-Eileanan Siar (the Western Isles), where prices average £105,376 recording a fall of 0.2%, North Ayrshire down 5.9% and Inverclyde down 9.4%.
Scotland’s mid-market has been driving house price growth over the year. As well as recording the top monthly ruse, the Shetland Islands saw a new price peak of £163,997 which pushed annual price growth to 13.2%. Argyll and Bute also recorded double digit growth of 10.6%.
There was also solid growth in prices in areas such as Glasgow, up 5.9% annually, neighbouring South Lanarkshire up 5.7% and Dundee up 5.1%.
The latest transaction data from the Office of National Statistics suggests that the cut in interest rates to 0.25% in August has provided a boost to the market in Scotland. Sales in September were up 10% on the previous month and were 9% higher than September 2015, the highest for the month since 2007.
‘Scotland’s market continues to make steady progress, not hitting the highs of some other parts of the UK, but also missing the lows. It enters the new year in a good place,’ said Christine Campbell, Your Move managing director in Scotland.
Alan Penman, business development manager for Walker Fraser Steele, part of the LSL group of companies, also believes that the solid mid-market helped Scotland’s property market remain strong in 2016.
‘The relatively modest growth belies an underlying strength, which is now less dependent on the relatively small number of high value sales that can sway the average figures,’ he pointed out.