Scotland's property market remains in robust form
House prices in Scotland have continued to rise, with the average price paid hitting a new record for the 11th time in the past 12 months.
According to the latest Walker Fraser Steele Acadata House Price Index, the average house price in Scotland in May 2022 is £220,870, some £17,100 higher than that in May 2021, meaning prices have risen by 8.4% on an annual basis.
John Tindale, senior housing analyst at Acadata, said this annual growth rate is the highest recorded to date in 2022, although rates for the 10 months from February 2021 to November 2021 were at the same level or higher. On a monthly basis, prices in May 2022 rose by 1%, or close to an equivalent of £2,300. This monthly increase is almost double the 0.6% recorded in April, with rates currently fluctuating on a monthly basis from December 2021 onward.
“One would never claim any market is bullet proof but on the current evidence, Scotland’s property market remains at the very least in robust form,” Scott Jack, regional development director at Walker Fraser Steele, said. “The rise in interest rates and the increase in the cost-of-living are not yet having a marked impact on house price growth. Ultimately, demand is strong, but the supply of desirable stock remains low. Property prices are therefore seemingly more resilient in the face of rising borrowing costs.”
The latest report on Scottish house prices also showed that transactions remain relatively strong, with April sales being at a 10-year high for the month at 8,232.
While data for May sales have not yet fully emerged from the Registers of Scotland, the provisional figure for May 2022 is 9,092 transactions, which is the second highest May figure of the last 10 years – the highest having taken place in 2019, the year before the pandemic struck.
“This suggests that the housing market in Scotland remains resilient, despite the potential headwinds of interest rate rises and the cost-of-living increases, which have been widely publicised in the press,” Tindale commented. “In general, the peak month for sales in Scotland is August, with an average 9,350 transactions, so we can anticipate reporting on a slow build in the number of properties being sold over the next three months.”
Read more: England and Wales house prices – new report reveals the latest.
High-value transactions are also continuing to occur at record levels in 2022, compared to the previous seven years, with Edinburgh accounting for 50% of all sales in Scotland having a value of £750,000 or higher.
There were 58 sales in excess of £750,000 during May 2022, and Acadata anticipates that this number will increase as further sales for the month are processed by the Registers of Scotland.
“The rise in the number of high-value homes being purchased in 2022 is an indication that the ‘lifestyle changes’ associated with the pandemic – ‘working from home’ and the ‘race for space’ – are still strong features of the current housing market,” Tindale noted.
“Over and above homebuyers, property remains attractive to investors too, as it continues to outperform other assets such as equities, which are affected more acutely by higher borrowing costs,” Jack added.
The Walker Fraser Steele Acadata House Price Index – formerly the Your Move Acadata House Price Index – is produced by Acadata on behalf of Walker Fraser Steele.
