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Average Scottish house prices reach record high

Average Scottish house prices reached a record high, increasing to £207,877, according to the July House Price Index from Walker Fraser Steele.

July saw the largest increase in average price in a month since March 2015, up by £6,000 and a lack of properties on the market has helped to support values.

This is the largest increase in a month since March 2015, which was just prior to the introduction of the Land and Buildings Transaction Tax (LBTT) in Scotland in April 2015.

Annually, 2021 has seen highest number of sales over £750,000 of last seven years.

The average house price in Scotland has increased by some £20,550 – or 11.0% – over the past 12 months, to the end of July.

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This is 2.5% higher than the 8.5% recorded one month earlier, and comes as something of a surprise, given that the annual rate had been slowing over the previous three months from a high in March 2021 of 11.4%.

In July 2021, all bar one of the 32 local authorities in Scotland saw their average prices rise over the previous 12 months – the one authority not to have done so being Na h-Eileanan Siar, where only 25 sales took place in July 2020.

On a regional basis, Na h-Eileanan Siar saw the only yearly decline, falling by 3.7%, as well as this it saw the greatest monthly decline, also down by 3.7%.

Meanwhile, Orkney Islands saw the highest annual rise, up 30.8% and the largest monthly increase, up 9.9%.

In July there are 12 such authorities, up from four local authorities in June, as well as Scotland’s own average price, which has also reached a new record level.

Last month Walker Fraser Steele noted that the ending of the LBTT tax holiday in March 2021 made little difference to the high-value end of the housing market, with the number of purchases of £750,000 plus homes in June 2021 actually exceeding those of March 2021.

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Walker Fraser Steele suggested that this was probably due to the level of tax saving being limited to £2,100 in Scotland (compared to a saving of £15,000 in England), a relatively small sum in relation to a property costing £750,000.

The tax holiday was therefore more likely to influence buyer behaviour at lower price levels, with purchases at £250,000 qualifying for the maximum tax savings.

Alan Penman, business development manager at Walker Fraser Steele, said: “The average house price in Scotland at the end of July stands at £207,877, a new record level, having risen by some £5,950, or 2.9%, in the month.

“This is the largest increase in a month since March 2015 just prior to the introduction of the Land and Buildings Transaction Tax in Scotland the following month.

“The average house price has increased by some £20,550 – or 11.0% – over the last 12 months. This is 2.5% higher than the 8.5% recorded one month earlier.

“The annual rate had been slowing over the previous three months from a high in March 2021 of 11.4%.

“But it is the continuing strong performance of larger properties that is supporting the current growth.

“Sales volumes, which now appear to be running at the levels seen in 2018, also suggest larger properties are supporting higher average prices.

“Lower transactions and strong prices at the top-end show that demand is exceeding supply with the focus of the market on higher value transactions supported by continuing record low interest rates.

“Combined with the previous tax savings associated with the LBTT holiday, these factors have encouraged the whole market to focus on larger properties and give cause to believe the exceptional performance of larger properties might continue for some months to come.”

By Jake Carter

Source: Mortgage Introducer

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Average Scottish house prices suffer first annual fall in 3 years

Property prices in Scotland dropped in February for the first time since March 2016, official figures have shown.

Registers of Scotland figures showed the average price of a property in Scotland in February 2019 was £145,762 – a decrease of 0.2 per cent on February in the previous year.

Aberdeen saw the greatest decrease, with prices falling seven per cent to an average of £149,435, while neighbouring Aberdeenshire also suffered a fall in values of 5.8 per cent.

Meanwhile, figures from the Office for National Statistics (ONS) showed that overall UK house prices are continuing to slow to the lowest annual increase in seven years, driven by dramatically falling prices in the previously buoyant market of London, where the value of a typical property slumped by 3.8 per cent.

Overall, prices rose just 1.7 per cent in January down to 0.6 per cent in February according to the latest official ONS figures – the lowest annual increase since September 2012. The average UK house price was £226,000 in February, £1,000 higher than a year ago.

North of the border, official figures showed that the biggest price increases were in Midlothian and Perth and Kinross where average prices increased by 9.9 per cent to £185,753 and 8.8 per cent to £192,631 respectively. Average price increases were recorded in the majority of local authorities – 22 out of 32 council areas – when comparing prices with the previous year.

Janet Egdell, accountable officer at Registers of Scotland, said: “The average price of a property in Scotland in February 2019 signalled the first annual decrease since March 2016, falling by 0.2 per cent in the year to February 2019.

“Prices increased in around two thirds of local authority areas and different property types showed a mixed picture, indicating that the market is highly variable across the country in this time of uncertainty.”

The volume of residential sales in Scotland in December 2018 was 7,392 – a decrease of 8.2 per cent on the original provisional estimate for December 2017. This compares with decreases of two per cent in England and 5.1 per cent in Wales, and an increase of 4.3 per cent in Northern Ireland.

The fall in London prices was the largest drop since mid-2009. However, the UK capital still has the highest average house price at £460,000.

Ben Brettell, senior economist at financial services firm Hargreaves Lansdown, said: “Annual UK house price growth slowed to 0.6 per cent in February, the lowest annual rate in seven years. London prices fell 3.8 per cent, their largest annual fall since August 2009 in the immediate aftermath of the financial crisis.

“This follows efforts by policymakers to cut down on riskier mortgage lending, though clearly uncertainty over Brexit will have played a large part in the capital’s faltering housing market.”

Mike Hardie, head of inflation at the ONS, said: “Annual house price growth has slowed to the lowest rate in close to seven years.”


Source: Scotsman