House prices in Scotland are rising faster than the rest of the UK, with annual growth of 5.6 per cent, according to estate agent’s Your Move.
Their Scotland House Price Index, compiled with Acadata, says a lack of supply is helped drive prices upwards in September, with a monthly increase of 1.4 per cent.
This pushed the price of the average property in Scotland up to £177,960.
The annual rate of growth – at 5.6 per cent – is significantly more than in other regions of the UK, and more than three times the growth rates seen across England and Wales.
In contrast to the housing market in England, property values in Scotland are being supported by rising prices in its major cities.
Chartered surveyors Walker Fraser Steele’s business development manager Alan Penman says: “We’re seeing strength right across Scotland at the moment, but crucially, it’s supported by the big cities. While London is a significant dampener on price growth in England, Edinburgh and Glasgow continue to show solid performance with above average growth.”
In fact, house price index shows that property prices in Glasgow hit a peak for the fourth time this year. The lion’s share of transactions were in these cities.
Your Move managing director Christine Campbell says: “The strength of the market in Scotland is impressive and, with property still relatively affordable and the economy growing, it could have some way yet to run.”
On the demand side, while interest rates rose in November, they remain at historically low levels. Unemployment in Scotland is at a 42-year low, and the economy is expanding, albeit at a slowing rate. The Scottish Government also has a number of schemes to help buyers onto the property ladder.
Your Move points out that much of this mirrors the rest of the UK. However, there is one crucial difference: affordability.
The Annual Survey of Hours and Earnings, recently published by the Scottish Government and ONS, shows Scotland’s median full-time earnings are the third highest in the UK, after Greater London and the South East.
However, the data in this house price index shows that median house prices in Scotland are the lowest in Britain – at £135,000. As a result the country has some of the most affordable property in the UK.
One challenge the market does share with the rest of the UK is a lack of supply. The RICS Residential Market Survey from September showed Scotland with the second lowest number of new vendor instructions in the UK. This, coupled with strong demand has helped push prices upwards again.
This housing index shows that only three out of 32 local authority areas in Scotland showed house price falls over the 12 months ending September 2017. These were Angus (down 2.6 per cent) Aberdeenshire (down 0.6 per cent) and West Dunbartonshire (down 0.3 per cent).
The regions with the strongest house price growth include Stirling (up 17.4 per cent annually), the Scottish borders (up 11 per cent) and Clackmannanshire (up 10.1 per cent).