House price growth in Scotland outpaced England and Wales over the year to June, standing at an average of 4.6% – up from 2.9% in May and well above England and Wales’ 3.3%, according to the latest Scottish House Price Index from Your Move.
House Price Growth in Scotland Outpaces England and Wales
On a monthly basis, average house prices in Scotland were up by a respectable 0.5%, marking the fifth consecutive month of growth, against three months of falling prices in England and Wales.
The latest available figures for Scotland, however, do not take account of the post-election period, but, with transactions estimated to be up by 8%, they show that the country entered it on a strong footing.
The average house price in Scotland now stands at £175,941 – up by £7,779 over the 12 months to June.
Continued growth in Scotland is driven by the strong performance of its two biggest cities – Edinburgh and Glasgow – where prices were up by an average of 2.9% and 2.8% respectively. Both also saw solid annual growth, of 4.6% and 10.6%.
Given the difference in average prices between the two, this shows considerable strength across the market. Edinburgh’s £256,737 is second only to East Renfrewshire (£262,203, which also grew by a strong 4.6% over the month and 7.5% year-on-year). Glasgow City, meanwhile, ranks just below mid-table, with an average property value of £154,666. The city itself, but also East Renfrewshire, Renfrewshire and North Lanarkshire, as well as all neighbouring areas, saw new peak prices in the month. So, too, did the Shetland Islands.
Sales in both Glasgow and Edinburgh were supported by strong interest in affordable accommodation from first time buyers. According to the Council of Mortgage Lenders (CML), the largest number of loans taken out in the first quarter (Q1) of 2017 was by first time buyers for flats.
More widely, prices are being driven by tight supply. In the latest survey from the Royal Institution of Chartered Surveyors (RICS), surveyors saw average stock sit close to an all-time low. They also reported a small increase in enquiries in June, but a decrease in the number of new vendor instructions. This is likely to continue over the next few months during the holiday period.
Across Scotland, 15 of the 32 local authority areas saw prices rise in June, led by East Renfrewshire (if Na h-Eileanan Siar in the Outer Hebrides is not counted, as prices rose by 9.1% on very low transaction volumes).
Annually, though, strength continues right across Scotland. Only four areas haven’t seen prices rise in the last year. East Lothian and the Orkney Islands lead the growth, both up by 12.2%, but with very different price points – £225,663 and £147,897 respectively. Midlothian, up by 11.1% to £207,430, as well as Glasgow, has also seen double-digit growth.
The largest decline in prices in June on the mainland was seen in Inverclyde – down by 5.6% – and, for the year, it was West Dunbartonshire. Already among the cheapest areas in Scotland, prices there are down by 4.1% to £108,079, although the price of flats in the area has actually risen by about £7,000 over the year, although they remain under £80,000.
The Managing Director of Your Move Scotland, Christine Campbell, comments: “With strong growth in both its biggest cities, Scotland’s market is on a strong footing, with first time buyers contributing to this increase in activity. The increase in transactions is also encouraging, but we need to get more properties onto the market if that’s going to continue.”
Alan Penman, a Business Development Manager for Walker Fraser Steele – one of Scotland’s oldest firms of chartered surveyors – adds: “It’s good to see growth at both the top of the market and in more affordable areas. There seems to be a particular hotspot around Glasgow – both the city itself and its neighbouring local authorities are all growing robustly.”