Annual house price growth in Scotland now over eight time higher than rest of Britain
Annual house price growth in Scotland has surged to over eight times more than England and Wales, including London and the South East the latest index shows.
Average annual growth in Scotland of 5.9% in the 12 months to January 2018 dwarfs the 0.7% rate recorded for the rest of Britain, according to the Your Move residential sales index.
The average price in Scotland is now £179,448, up £10,000 on a year ago, and new peak average prices were set in nine of 32 local authorities. The figures show the average house increased by £2,800 in the first month of this year alone.
Other than the 9.6% spike in March 2015 ahead of the Land and Buildings Transaction Tax introduction, this is the biggest increase since February 2007 at the height of the last housing boom.
The Scottish market recorded its biggest monthly increase in over a decade at 1.6% with month on month price growth of 4.8% in Edinburgh accounting for over half the monthly increase.
But it was the Scottish Borders which saw the biggest monthly rise in prices, up by 6.2%, and accounting for 23.1% of the annual increase, on a weight adjusted basis. Glasgow accounted for 14.3% of growth, Fife 8.8% and East Dunbartonshire 6.2%.
The biggest annual price growth was in East Dunbartonshire with values up 13.5%, taking prices to £260,776 while Renfrewshire saw growth of 11.8%, Falkirk 12% and North Lanarkshire 5.1%.
East Ayrshire is the cheapest area in Scotland with an average price of £115,630 and was one of only six areas to see prices fall in the last 12 months.
Edinburgh remains the most expensive area, with average prices up 7.6% annually to £264,903, while Glasgow set a new peak average price in the month of £158,851, up 1.1% in the month and 8.4% annually.
According to Christine Campbell, Your Move managing director in Scotland, the growth is due in large part to the performance of the markets in both Edinburgh and Glasgow. ‘It is still too soon to say what the principal drive behind Scotland’s performance is, however there has been an observable pattern that the number of sales on prime properties above £750,000 has increased over the last 12 months,’ she said.
‘On top of this, there has been a general increase in the price of flats in Edinburgh, likely due to first time buyers looking for more affordable living solutions in the capital. As we move further into 2018, it will be interesting to see how low interest rates, and an increasing shortage of property for sale continue to affect the market north of the border,’ she added.
Alan Penman, business development manager for Walker Fraser Steele, one of Scotland’s oldest firms of chartered surveyors, believes that the growth reflects strong fundamentals and some very attractive areas for buyers. ‘We should also be aware, though, that while we can’t say exactly how much of rising prices is down to a tight availability, it’s a pressing and continuing problem,’ he added.