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Scottish Building Society: Lack of supply leading to higher Scottish house price growth

House prices in Scotland are growing faster than the rest of the UK, however, Scottish Building Society chief Paul Denton has warned that demand outstrips supply.

House prices in Scotland are growing faster than the rest of the UK with the average property £154,798 – an increase of 3.5% year on year, according to government House Price Index (HPI) figures released today.

The UK average was £235,298, up 2.2% on November 2018 and an increase of 0.4% on the previous month.

The volume of residential sales in Scotland in September 2019 was 8,628, an increase of 1.8% on the original provisional estimate for September 2018. This compares with an increase of 3.3% in England, 1.3% in Wales and 4.9% in Northern Ireland.

The HPI report says: “Prices vary across Scotland, with the highest-priced area to purchase a property being City of Edinburgh, where the average price was £277,600, and the lowest-priced area being East Ayrshire, where the average price was £95,941.”

Paul Denton, chief executive of Scottish Building Society, said: “The figures relate to November, so it is too early to assess the long-term impact of the General Election result on the Scottish market.

“Many commentators predict economic uncertainty to ease in 2020 with a resultant increase in transactions. However, while consumer confidence is important, demand continues to outstrip supply. We would support any initiative to help people on to the property ladder, including accelerating the number of new homes being built.

“Last month, we became one of the first lenders to take applications from the Scottish Government’s First Home Fund . This will make the housing market fairer by providing £150 million until March 2021 to help 6,000 people buy their first home.”

The UK HPI is calculated based on completed sales at the end of the conveyancing process. This means that while the UK HPI may not be as timely in publishing as the other measures, it is however ultimately more complete with coverage of both cash and mortgage transactions for the whole of the UK.

Source: Scottish Construction Now

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Scottish house price growth slows to 4.4%

Annual Scottish house price growth fell to 4.4% in June after a 0.7% monthly fall, Your Move’s House Price Index has found.

The fall has been driven by a slowdown in Edinburgh, where prices fell by 1.0% month-on-month but are still 8.3% higher than a year ago.

The Shetland Islands have the highest annual house price growth (20.5%), followed by West Lothian (10.6%) and Inverclyde (10.4%).

Christine Campbell, Your Move managing director in Scotland, said: “The market in Scotland has noticeably slowed as we’ve gone into the summer yet it still shows some strong annual growth, and it’s encouraging to see almost all areas showing positive performance.”

Scotland’s house prices averaged at £182,163 in June, £7,759 more than a year ago.

Edinburgh has the highest house prices in Scotland, averaging at £273,897.

Alan Penman, business development manager for Walker Fraser Steele, one of Scotland’s oldest firms of chartered surveyors and part of the LSL group of companies, said: “Despite a slowdown, Edinburgh remains the foundation of the market in Scotland, showing a market with considerable resilience.”

Source: Mortgage Introducer

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Scottish house price growth up 7.7% in March

Scottish annual house price growth has accelerated again, rising by 7.7% in March, compared to just 1.0% in England and Wales as a whole for the same month, Your Move Scotland House Price Index has found.

Wales, bolstered by high value sales as buyers rush to beat the new land transaction tax in April, also still trailed well behind, with annual growth of 4.8%.

Moreover, while prices fell between February and March in England and Wales, they continued to grow in Scotland, up 1.2%. That puts the average price at £184,850, up more than £13,000 in the last 12 months from £171,614 last March.

Christine Campbell, Your Move managing director in Scotland, said: “The Scottish market goes from strength to strength, with Edinburgh driving growth, but excellent performance found across the country. With property in Scotland still very affordable, it is possible this will continue, too.”

Alan Penman, business development manager for Walker Fraser Steele, Scottish chartered surveyors and part of the LSL group of companies, said: “We should welcome the growth we’re seeing in property prices in Scotland because it reflects a strong economy.

“We shouldn’t be blind to the fact that price increases reflect not just strong demand, but also a pronounced lack of supply in housing, however.”

The contrast in fortunes of the Scottish and English housing markets finds its starkest expression in the respective capitals.

While average prices in London were down 2.5% in the 12 months to the end of March, they were up 14.5% in Edinburgh and continue strong.

Edinburgh accounted for 45% of the £2,147 increase in Scotland’s average house price in March, on a weight-adjusted basis. In part, the strong performance in Edinburgh is down to strong sales of high value properties.

The number of transactions for £750,000 or over in the city in the first three months of the year – at 62 – is more than double last year (24).

Overall, 26 out of 32 local authorities in the country recorded growth in the last year with 10 setting new peak average prices in March.

They include several that, like Edinburgh, showed double digit growth for the last year.

Falkirk, which leads the way with annual price growth of 15.4%, was bolstered by rising prices of detached properties and new builds sold off plan. East Renfrewshire, the most expensive area outside Edinburgh and with prices growing almost as fast, was up 13.4% annually.

Midlothian (10.4%) and the Scottish Borders (12.0%), which also have above average prices; but also West Lothian (12.4%) and Fife (11.6%), where prices are below the average for Scotland as a whole, all saw double digit growth too.

Glasgow City (up 10.5%), Dumfries and Galloway (10.6%) and Renfrewshire (10.5%) are also all still recording strong annual growth.

John Tindale, senior housing analyst for Acadata, said: “The March housing market House prices in Scotland rose by 1.2% in March, down from the exceptional 2.2% in February, but still the third-highest rise in any single month of the last twelve.

“On a weight-adjusted basis, which takes into account both the increase in prices and the number of transactions involved, Edinburgh accounted for 45% of the £2,147 increase in Scotland’s March 2018 average house price.

“The second-largest contributor to the increase in Scotland’s average price in the month was East Lothian, where prices rose by 3.8%.

“Edinburgh and East Lothian combined accounted for 52% of the price increase seen in Scotland in the month, suggesting that the main focus of price growth in March was around the capital.”

Tindale added: “Over the last 12 months, the average house price in Scotland has increased by £13,236, or 7.7%, and now stands at £184,850. This is the highest annual rate since March 2008, if one ignores the period around the introduction of land and buildings transaction tax.

“Not only is Scotland currently seeing the highest growth rate in its house prices for ten years, but it also tops the league in terms of house price growth in the United Kingdom.

“Average house prices are currently climbing at an annual rate of 0.9% in England, 4.8% in Wales and 4.3% in Northern Ireland.”

Source: Mortgage Introducer