House price growth in Scotland has increased for six months in a row and is now the second highest in the UK, according to the latest index figures.
Property prices rose 0.1% in July and were up by 4.7% year on year, with only the East of England seeing higher growth, taking the average price to £175,877, the data from the Your Move Scotland index shows.
The index report says that the rise in Scottish prices persisted in spite of political uncertainty as these were the first full month of figures following the unexpected election result in June which resulted in a hung Parliament.
It also says that house price growth in Scotland is supported by persistent low interest rates, and an economy that continues to grow, benefiting from unemployment at a 42 year low.
Half the country’s 32 local authority areas saw house prices grow over the month, and only four, Aberdeenshire, West Lothian, Inverclyde and West Dunbartonshire, haven’t seen growth in the last year.
The highest increase in prices on both an annual and monthly basis was in Clackmannanshire, where values were up an average £12,500, or 9.6% over the year. Relatively few sales make prices in the area volatile, however.
More significantly for the country, its biggest cities continue to perform strongly. Edinburgh overtook East Renfrewshire as the most expensive area, with price growth of 1.4% in July, to £257,676 and up 7.1% year on year.
Glasgow, which at 16th, sits right in the middle of the league table of prices, saw 0.9% monthly growth, reaching a new peak for the third month in a row and the only other area to see a new peak was Angus.
The index report reveals that prices in Glasgow now stand at an average of £155,086, up 7.3% year on year with growth driven by flats and terraced properties both of which are popular with first time buyers and buy to let landlords, the two most active sectors in the market currently.
While transaction volumes in the two cities mean they weigh most heavily on the overall average, areas across the country and across price bands have seen strong growth in the last year. East Lothian, Midlothian, Moray, Renfrewshire, the Orkney Islands, and Dumfries and Galloway all saw similar or higher growth, as well as Clackmannanshire.
The largest fall in house prices in Scotland over the year was a decline of 2.8% in Inverclyde, which is in part due to elevated sales last year. A number of new build detached properties were sold in Inverkip in 2016 and this hasn’t been repeated in 2017.
‘Values continue to grow strongly within Scotland and this is particularly evident in Edinburgh and Glasgow. This is fuelled, in part, by the ongoing strong demand for properties but also the lack of stock available,’ said Christine Campbell, Your Move managing director in Scotland.
‘Many potential sellers want to make a move but, unable to find a property to move to, are taking a ‘wait and see’ approach and this, in turn, is creating a gridlock which is affecting the movement of properties across most price bands,’ she added.
According to Alan Penman, business development manager for Walker Fraser Steele, even after a year’s solid growth, Scottish property overall still looks affordable relative to the rest of the Britain. ‘That should give us confidence for the coming months,’ he added.
