Residential property prices in Scotland increased by 1.9% in April after stalling in March and are now 3.6% higher than the same month in 2016, overtaking the annual growth in England and Wales.
The latest index also shows that Glasgow and six other regions in Scotland recorded new peak prices with the average for the whole of Scotland reaching £175,087 due to increased demand from first time buyers and a lack of supply.
It is the strongest monthly growth since 2007 if price spikes in March 2015 and 2016 as a result of changes to the Land and Buildings Transaction Tax are taken out of the equation, the index report from Your Move Scotland reveals.
The report says that the strong growth in April reflected both fundamental strength and fundamental weakness in the Scottish housing market. On the one hand, the increase seen in April is driven by significant growth across a broad section of the market, rather than being driven solely by a hike at the top.
Indeed, sales of high value properties priced over £750,000 continue to trail last year’s totals as just 17 were sold in April 2017 compared to 27 in the same month last year and it is first time buyers are pushing the Scotland housing market forward, supported by low interest rates and lower deposits required by lenders.
The report also suggests that economic growth and employment opportunities in Scotland are pushing up property prices in many areas.
A breakdown of the figures show that the strongest annual growth was in East Renfrewshire, up 7.5%, followed by Argyll and Bute up 10.5%, East Dunbartonshire up 10%, Moray up 8% and Edinburgh up 3.1%.
East Renfrewshire, Midlothian, Moray, the Orkney Islands, Glasgow, Renfrewshire and Falkirk all saw new peaks in average prices in April. Overall, two thirds of Scotland’s 32 local authority areas saw prices rise in the month, and 23 of the 32 have seen prices rise over the year.
‘It is first time buyers who are driving the market as they continue to take advantage of ongoing low interest rates and relatively low deposit requirements. They are influencing local markets which is leading to greater balance in prices amongst Scotland’s major cities,’ said Christine Campbell, Your Move managing director in Scotland.
‘While the election result may have come as a surprise to some, it is imperative that demand for first time buyer properties is met with increased supply through new builds and that confidence in the market is restored to encourage activity across the board,’ she added.
According to Alan Penman, business development manager for Walker Fraser Steele, one of Scotland’s oldest firms of chartered surveyors, the supply issue needs to be addressed. ‘While it’s encouraging to see the demand from first time buyers, we need to address the fundamental weakness in supply of housing stock in Scotland, as elsewhere in the country,’ he added.
