Overall market outlook remains positive, report finds
Scotland’s housing market experienced a slight dip in June, with average house prices decreasing by nearly £1,700, or 0.7%, compared to May, according to the latest House Price Index from Walker Fraser Steele.
The average house price in Scotland now stands at just under £224,000.
Still, house prices in Scotland remain over 1% higher than their previous peak in September 2023. Scotland has also seen a stronger and earlier recovery in house prices compared to England and Wales, where prices have been stagnant since mid-2023.
“After three months of growth and a new record high, Scotland’s house prices paused for breath in June with a slight drop of 0.7% or nearly £1,700 on average,” said Scott Jack (pictured), regional development director at Walker Fraser Steele. “Despite this fall, Scotland’s house prices continue to outpace those seen in England and Wales.
“On an annual basis, Scotland has shown positive movement in 11 of the last 12 months, again outstripping England and Wales which have yet to record a single month of annualised positive house price movement.”
While June was a quieter month, with nine local authorities recording rising prices — the lowest figure in three years — this trend is viewed as a temporary pause rather than a significant downturn. Three local authorities, South Lanarkshire, Angus, and East Ayrshire, reached new price highs, with Angus notably experiencing six consecutive months of price increases.
In June, 20 local authorities reported stronger prices than a year ago, marking the fifth consecutive month where more authorities saw year-on-year price increases than decreases. However, East Lothian, one of Scotland’s most expensive areas, was a notable exception, recording a significant price drop.
Sales transactions also softened in June, with final numbers yet to be fully logged, but initial data suggests a decrease in activity compared to June 2023. This decline is attributed to high mortgage rates, cost-of-living pressures, and uncertainty surrounding the General Election and potential interest rate cuts.
Despite June’s setbacks, the overall market outlook remains positive. The year-on-year gains seen in April and May suggest a potential recovery later in 2024. Sales in Edinburgh and properties valued over £750,000 have remained strong, surpassing 2023 levels.
The recent 0.25% base rate cut by the Bank of England has led to reduced mortgage pricing, though a return to historically low rates seems unlikely. First-time buyers across the UK continue to face affordability challenges, though Scotland remains more affordable compared to other regions.
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