Scotland prices and demand remains high - David Alexander
Research by Rightmove this week revealed that Scotland has the fastest house sales in the UK and had the highest year-on-year price growth of anywhere in the UK. Houses in August took an average of just 32 days to sell compared to more than 60 days in most of England and 64 days in Wales. In Scotland average prices were up 2.6% and, while some areas in England such as Yorkshire and Humber showed an increase of 1.8% over half of English regions recorded a price drop.
For those of us working in the sector this will come as no surprise. Despite the interest rate rises, the cost-of-living crisis, and fairly doom-laden predictions for the economy Scots have continued to enthusiastically embrace the joys of home ownership.
The Scottish housing market remains remarkably resilient with prices and demand remaining consistently high. As ever with such data the devil is in the detail. This is not a universal picture of a lively housing market across all parts of Scotland or indeed among all property types but is, instead, very mixed with some areas thriving while others are static or falling.
While the latest official House Price Indicator (HPI) data shows that the average house price in Scotland fell by just 1.2% between July 2022 and June 2023 (the latest month for which there is data) there are enormous regional and property type variations.
Within these numbers there are pockets of enormous price growth where some areas seem to be unaffected by interest rate rises or falling demand while elsewhere the market is flat. The best performing area in Scotland is East Lothian where average prices have risen by 14.7% and Edinburgh has witnessed a 1% rise over the latest 12-month period.
But it is the performance of specific types of property where prices continue to increase at a phenomenal rate. While average prices for detached properties across Scotland increased by just 0.4% in one year, in East Lothian they rose by £88,675 which was an increase of 16.6%, while in Edinburgh they were up 2.7%.
In Glasgow average prices have fallen by 1.2% over the year; in East Renfrewshire they fell 0.7% while in Dundee they are down 2.3%. Flats are among the worst performing properties with average prices falling by 2.3% while detached properties across the whole of Scotland have increased in price by 0.4%.
There is therefore quite a mixed picture with some areas still thriving and dynamic while others are being impacted by rate rises, the cost-of-living concerns, and buyer wariness of where the economy is going to go next.
Therefore, some may feel that the latest data does not reflect their area or their property type. This is always the case with some parts of the market increasing while others are falling. But this latest surge in prices is more unusual in that it has been so prolonged. Having begun just after the pandemic began there has been a remarkable increase in prices which has not been corrected in the intervening years.
Furthermore, there is little sign of a slowdown in the detached and semi-detached homes market with buyers still keen to have their own gardens and outdoor space.
That the Scottish housing market remains quite so buoyant after such a prolonged period of rate rises and concerns of a correction is testament to its resilience.
I also believe that Edinburgh and the surrounding areas have a much broader buying market than other parts of the country with people from across Scotland, the rest of the UK, and abroad still keen to live in and around the capital.
But as with all predictions you have to be cautious and while the Scottish market remains positive there must come a point at which demand slows, prices falter, and transactions slow. So, while it would be churlish not to welcome this latest data it is important to keep a realistic view on where the market is now and where it might be in six to twelve months time.