Property market recovery in Scotland continues with prices up 3% year on year
The property price recovery in Scotland is continuing with the latest index showing values increased by 3% or £4,932 in July compared to the same month last year.
This takes the average price in Scotland to £169,807 and the data from the Your Move Acadata house price index also shows that month on month prices increased by 0.2%.
According to Christine Campbell, Your Move managing director in Scotland, house prices in Scotland remain resilient despite the vote for the UK to leave the European Union although it is too early to fully evaluate the impact of Brexit.
The data shows that a new peak in average home prices of £146,965 was reached in Glasgow in July although overall there has been a slowdown in Scotland for higher value homes.
Campbell pointed out that the most recent transaction data available from the Office of National Statistics for April shows a dramatic reduction in sales linked to the introduction of the 3% surcharge on second homes and buy to let properties. The surcharge saw a surge in sales in March, as transactions were brought forward to beat the additional charge.
With 11,017 transactions, March was the busiest month since November 2007, at the height of the property boom. Sales in April returned to more usual levels, with 6,665 transactions, a fall of 40% on the previous month, but comfortably above sales in January and February.
As in England and Wales, transactions are now at similar levels to 2013 for the time of year and look likely to continue similarly. The surge in March, meanwhile, means sales year to date are still well ahead of the level for the same period last year. April’s tax change also continues to shed more light on price movements than any other factor, including the Brexit vote.
Ignoring a spike in prices from the March surge, Scotland has now seen pretty consistent, steady growth month on month since April 2015. This is despite a slowdown in high value property.
Edinburgh, with the highest average property prices in Scotland, has seen the number of properties sold at £500,000 or more in the first half of 2016 fall by nearly a quarter on last year. This is consistent with the increased rates of Land and Buildings Transaction Tax (LBTT) introduced in April 2015.
In its place, cheaper areas have taken up the slack. Glasgow, where average prices are well below the £254,000 threshold for the higher LBTT rate, reached a new peak in July, with prices rising 3.4% month on month and 6.2% year on year.
East Lothian and Perth and Kinross topped the monthly table, though, with prices up 7.6% and 6.2%, respectively. On an annual basis, meanwhile, Renfrewshire continues to record the biggest rises, but Eilean Siar, where the average house is £111,002, is not far behind with prices up 11.2% annually.
‘We’ll have to wait another month or two to begin to see the real impact of Brexit, but the Scottish market has already well demonstrated its resilience. The long recovery in average prices continues and is increasingly being led by the more affordable areas, such as Glasgow, where growth looks to be robust,’ Campbell added.