Scotland’s house prices show varying regional fortunes
- Midlothian has highest mainland annual growth rate in January at 9.9%
- City of Edinburgh the largest weighted fall in prices annually
- Rising prices in 16 local authorities over year, as in December
- 2023 total transactions lowest since 2013
- Average Scottish House Price now £221,693, unchanged on December, 0,2% up annually
Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “This month saw negligible movement in the monthly house price, with January’s transaction figures telling a story of a market whose home movers are doing so out of necessity rather than discretion.
“This may change as rates settle but for now the impact of prices is clear. The January average house price figure stands at £221,693, which only differs by -£19 from the revised figure for December.
“However, as we have noted before, it is only when we look under the bonnet of the national headline that we can see there has been considerable variation at a local level. Our analysis shows that 16 local authority enjoyed price rises in the month and 16 with price falls, ranging from +9.7% in Inverclyde to -4.2% in Moray.
“From January 2023 to January 2024, Midlothian, Aberdeen City, East Renfrewshire and Stirling account for 50% of the gains which have been made over the year, and all have all seen a reasonably large increase in the average price of detached homes.
“On an annual basis there is a slightly larger movement in values, with prices in January 2024 having increased by £520, or +0.2%, compared to a fall in December 2023 of -£670, or -0.3%, over the year. This positive movement may herald a slightly broader improvement as lower mortgage rates, alongside expectations of Bank of England interest rate cuts in the second half of the year, should help buyer confidence in the short term.”
Commentary: John Tindale, Acadata Senior Housing Analyst
Once again Scotland’s average house price has barely changed in the current month, with January’s average figure at £221,693, which only differs by -£19 from the revised figure for December. However, as in several recent months, the national average of “zero change” masks considerable variation in prices at the more local level. For example, in January, there are 16 local authority areas with price rises in the month and 16 with price falls, ranging from +9.7% in Inverclyde to -4.2% in Moray.
On an annual basis there is a slightly larger movement in values, with prices in January 2024 having increased by £520, or +0.2%, compared to a fall in December 2023 of -£670, or -0.3%, over the year. Again, on an annual basis, there are 16 local authority areas with price rises and 16 with price falls, the same number as seen in December. The movements in average prices at local authority level for the month and year are shown in Table 2 on the next page.
Looking at the weighted movement in prices, from January 2023 to January 2024, there are four local authority areas that account for 50% of the gains which have been made over the year, namely (with the percentage of the 50% gain in brackets): – Midlothian (+16%), Aberdeen City (+13%), East Renfrewshire (+12%) and Stirling (+9%). The one common feature of the four areas is that they have all seen a reasonably large increase in the average price of detached homes.
Interestingly, over the same twelve-month time period, the City of Edinburgh has had the largest fall in prices, accounting for -18% of the reduction in average values in Scotland on a weight adjusted basis.
The majority of this fall in Edinburgh arises from the drop in average values of terraced properties and to a lesser extent semi-detached homes, while the average price of detached homes and flats has continued to rise.
Terraces in Edinburgh do of course include some magnificent examples of grand Georgian architecture, as evidenced by the highest-priced property sale of the month (as described on page 6), with the average price of terraces in Edinburgh being £360k, double that of the average for Scotland at £180k.
Figure 1.Scotland’s average house price for the period from January 2022 to January 2024
Figure 1 shows how average house prices in Scotland have changed over the two years from January 2022. It can be seen that there was a slight dip in prices over the period from December 2022 to March 2023, which may be about to repeat itself, albeit to a lesser extent, some twelve months later. However, aside from this small dip, average prices have been relatively stable over the seventeen months from July 2022 to November 2023.
Local Authority Analysis
Table 2. Average House Prices in Scotland, by local authority area, comparing December 2022, November 2023 and December 2023
Table 2 above shows average house prices, calculated on a seasonal- and mix-adjusted basis, by Local Authority Area, for January and December 2023 and January 2024, together with the corresponding percentage price changes over the last month and year. The ranking figures are based on average house prices in January 2023 and 2024. Line items are shaded in blue in cases where average house prices in the Local Authority Area have experienced record highs in January 2024.
Annual change
The average house price in Scotland in January 2024 has increased by £520, or 0.2%, over the last twelve months, which is 0.5% higher than the revised rate of -0.3% in December 2023, one month earlier. The revised December 2023 figure of -0.3% is the first time the annual growth rate has been negative since May 2016, some seven and a half years earlier.
In January 2024, 16 of the 32 local authorities in Scotland were reporting a positive movement in prices over the previous twelve months, the same number as in December 2023.
Midlothian had the highest annual rate of price growth in January of all local authority areas on the mainland, at 9.9%, having been in second position in December. In Midlothian, all property types have seen an increase in values over the last twelve months, with detached homes and terraces having the largest influence on prices, with two new-build detached homes selling in Roslin, some seven miles south of Edinburgh, for £715k apiece.
Staying on the mainland, Stirling has the second-highest annual growth rate at 7.4%. All property types – except semi-detached – have experienced average price increases in Stirling, but this month it is flats that have seen the most significant rise, up from an average £145k in January 2023 to £185k one year later, assisted by the sale of a three-bed penthouse apartment in the Bridge of Allan, for £410k.
At the other end of the scale, the area on the mainland with the largest percentage fall in prices over the last twelve months was West Dunbartonshire, at -8.5%. In West Dunbartonshire, all property types saw prices fall over the year, with the largest fall this month being flats, down from an average £100k in January 2023 to £95k one year later. This means that West Dunbartonshire now has the seventh-lowest average price for flats in Scotland’s 32 local authority areas.
Monthly change
In January 2024, Scotland’s average house price fell by just -£19, or 0.0%, which contrasts with the revised -£1,250, or -0.6%, change in prices in December 2023. Scotland’s average house price now stands at £221,693, a level first reached in July 2022.
In January 2024, 16 of the 32 Local Authority areas in Scotland experienced rising prices in the month, the same number as seen in December 2023. The area with the highest increase in its average price in the month was Inverclyde, up by 9.7%. All property types saw an increase in their average prices in Inverclyde, with the largest rise being in detached properties, assisted by the sale of a recently renovated five-bedroom detached home, located in Kilmacolm, some 15 miles to the west of Glasgow, for £1.4 million.
In second place, with a monthly increase of 5.6% is East Ayrshire. All property types, except for terraces, saw an increase in prices in the month, with semi-detached homes rising from an average £143k in December 2023 to £160k in January 2024. The increase in average prices in the month was assisted by the sale of a £767k detached property in Dunlop, some seven miles north of Kilmarnock.
By way of contrast, the area on the mainland with the largest monthly fall in its average price was Moray, down by -4.2% in the month. All property prices saw a fall in Moray in January, with the largest being in terraced homes, down from an average £156k in December to £148k in January – although January tends to be a quiet market, with only 13 terraced sales having been recorded to date in the month.
For interest, the highest-priced residential property to have been sold in Scotland in January 2024 was a four/five-bedroom Georgian terraced home in Great King Street, New Town, Edinburgh, which forms part of the UNESCO World Heritage site – it fetched £2.25 million.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2019 to January 2024, based on Registers of Scotland (RoS) figures for the Date of Entry (except for January 2024, which is based on RoS Application Dates).
The first year on the chart, 2019 (light blue line), was relatively “normal” having an average 8,560 sales per month, some 2.1% higher than the total for 2018, but -0.3% lower than 2017.
As can be seen, 2020 (the turquoise line) was more varied, the Covid pandemic having manifested itself in March 2020, with the first lockdown taking place in April 2020, when the market slumped to just 2,637 sales. There was then a slow path to recovery during the remainder of 2020, with a peak in transactions in October 2020 of 13,045 sales, as the benefit of the LBTT tax holiday and the mantras of the “race for space” and “work from home” came to the fore.
There was a second peak in transactions in March 2021 (the brown line), as purchasers scrambled to take advantage of the tax holiday, before its cessation on April 1st 2021. In 2022 (the red line), house purchases returned to near normality, with the first nine months of 2022 seeing an average 8,600 sales per month. However, Liz Truss came into power on 6 September 2022, with her mini-budget, which resulted in the bank base rate being raised to 2.25%. The bank rate was further increased on 3rd November and 15th December 2022, ending the year at 3.5%.
Figure 2.The number of sales per month recorded by RoS based on entry date from 2019 – 2024
This brings us to 2023 (the yellow line) – the relatively high bank rate of 3.5% had an adverse effect on property transactions, with only 5,915 sales for January 2023 – the lowest January total since 2013. Although the housing market in 2023 did enjoy the spring bounce in transactions that occurs traditionally in March, the bank base rate was increased a further five times in 2023, reaching 5.25% on 3rd August 2023 (the current rate). Over the twelve months of 2023, sales have amounted to some 91,200 properties, which is 12.0% down on 2022 and is the lowest annual total since 2013.
Sales for January 2024 are still being processed, but early indications are that total sales will be even lower than January 2023.
Scotland transactions of £750k or higher
Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – January 2024
Table 3 shows the number of transactions per month in Scotland which are equal to or greater than £750k. The threshold of £750k has been selected as it is the breakpoint at which the highest rate of LBTT becomes payable.
There were 59 such transactions recorded by RoS during January 2024. Currently, this is the fourth-highest January total recorded to date, but with RoS processing further data for the month, it may possibly rise to third place in the yearly rankings – this will become evident next month. Following the pandemic, July 2022 had the highest monthly total of 137 sales over £750k, when transaction counts were still “catching-up” with the lost months of the pandemic years.
Looking at the total number of high-value properties sold in each year in Table 3, 2022 is ranked first with 1,231 high-value sales, 2021 is in second place with 1,102 sales, while 2023, with 1,071 sales, is ranked third.
However, there is a clear trend, in that the totals in each month of 2023 are lower than, or equal to a year earlier. In aggregate, the high-value 2023 transactions are currently down on the 2022 total by 13%, compared to a 12% downturn in sales volumes in the market as a whole, indicating that last year’s enthusiasm for the purchase of high-value homes has marginally decreased from a year earlier.
Edinburgh accounts for 474 of the 1,071 high-value sales (44%) that have been recorded by RoS in 2023, compared to 48% in 2022. In 2023, East Lothian finished in second place with 73 such sales, closely followed by Glasgow in third place with 69 sales. Glasgow is currently 9 sales ahead of fourth-placed East Renfrewshire, with 60 high-value sales, and finally we have two authorities in equal fifth position, being East Dunbartonshire and Fife, with 55 sales each.
Sales for January 2024 are still being processed by RoS, with 59 high value sales having been recorded to date, of which 25 relate to Edinburgh (42%).
Peak Prices
In Table 2 above, those areas which have reached a new record in their average house prices are highlighted in light blue. In January 2024, there was 1 such authority being Inverclyde, the same number (although not the same authority) as in December 2023. The movement of prices in Inverclyde in January 2024 has been discussed in the “Monthly Change” section on page 5 above.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending January 2024. As reported above, 16 of the 32 Local Authority Areas in Scotland have seen a rise in their average property values over the last year. The highest rise over the year was in Na h-Eileanan Siar, at 11.2% growth, with the largest fall in the year in the Orkney Islands at -14.0%.
How Scotland Compares
Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-January 2024 Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-January 2024
Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, North East and North West for the period January 2020–January 2024
Scotland’s Eight Cities
Figure 5. Average house prices for Scotland’s eight cities from November 2022–January 2024
Figure 6. Average house prices for Scotland’s eight cities January 2024
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