Tag: House Price Index

Scottish House Prices show little change since May

Walker Fraser Steele October House Price Index

  • Prices are down £80 since May, compared to England and Wales which are down £5,500
  • Transactions are 11% lower than in 2022
  • Three Local Authority areas still reporting record average house prices
  • Average Scottish House Price now £223,354, down 0.3% on September, up 0.4% annually

Table 1. Average House Prices in Scotland for the period October 2022 – October 2023

(The prices are end-month smoothed over a 3 month period

Note: The Walker Fraser Steele Acadata House Price Index (Scotland) provides the “average of all prices paid for houses”, including those made with cash.

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “Our data shows that in October, the average house price in Scotland decreased by around -£650, or -0.3%, to £223,354.

“Scotland’s average house price has actually barely changed over the last five months, hovering in the £223,000 range. To put this in context, we need only compare to Wales and England, where average prices have decreased by £5,500 over the same period of time.

“There were price increases in just 12 Local Authority areas and of particular note is Stirling which saw the largest gain in average prices, and saw a surge in students at the beginning of the academic year, which contributed to an increase in the cost of apartments in the neighbourhood. Fife, by contrast, experienced the largest fall in prices in the month on a weight-adjusted basis, with all property types showing a fall.

“2023 has been a harder year. The rising base rate has adversely impacted property transactions. Although the housing market in 2023 did enjoy the traditional spring bounce in transactions that occurs in March, sales volumes from July 2023 onward have been below all previous years since 2013. Sales over the first ten months of 2023 are down by 11.3% compared to the equivalent period in 2022.

“I’m optimistic that with a stable base rate, lenders are now starting to compete for business with competitive mortgage rates which, with better inflation figures, should encourage transaction levels over and above those we expect from the remortgaging business due in the first quarter of next year.”

Commentary: John Tindale, Acadata Senior Housing Analyst

October’s housing market

Scotland’s average house price fell by some -£650, or -0.3%, in October, and now stands at £223,354. In fact, looking at Table 1 above, it can be seen that for the past five months, from May onwards, Scotland’s average house price has remained in the £223,000s, with only minor fluctuations over the period. This contrasts sharply with England and Wales, where average prices have fallen by £5,500 over the same timescale.

There were only 12 Local Authority areas with price rises during the month of October – but the rises tended to be quite large when expressed in monetary terms. The highest increase in average prices was in Stirling, where the average price increased by £7,700, assisted by the sale of a £1.4 million detached home in Dunblane. In addition, Stirling has also seen an influx of students at the start of the academic year which has helped to boost the price of flats in the area.

At the other end of the scale, Fife has experienced the largest fall in prices in the month on a weight-adjusted basis, with all property types showing a fall in prices – the largest fall being in flats, down from an average £143k in September to £138k one month later. Glasgow City had the second-largest fall in the month, with the largest reduction – on a weight-adjusted basis – also being in flats, with average prices in the month down from £190k to £187k. Fife and Glasgow combined accounted for 30% of the weight-adjusted price falls in the month.

Looking at the movement in average prices compared to twelve months earlier, there has been a gain of some £975, or 0.4%, in Scotland over the year. There were 17 Local Authority Areas with price rises for the twelve months ending October 2023, and 15 with price falls. Taking a weighted average of the top 16 areas by value, the gain in prices over the year amounted to £950, compared to a £25 gain for the bottom 16 areas by value. It can therefore be concluded that it is the higher value areas in Scotland that have experienced the majority of the price gains over the last twelve months.

Figure 1. Scotland’s average house price for the period from March 2020 to October 2023

Figure 1 shows how average house prices in Scotland have changed since the start of the Covid pandemic in March 2020. It can be seen that the average price has barely moved over the last twelve months, although values have risen by £40,350 from March 2020. This increase of 22.1% over the period compares to a figure of 19.9% in the CPIH Index – so in real terms (after allowing for consumer price inflation), the average house price in Scotland since the start of the pandemic has risen by 2.2%.

Local Authority Analysis

Table 2. Average House Prices in Scotland, by local authority area, comparing September 2022, August 2023 and September 2023

Table 2 shows average house prices, calculated on a seasonal- and mix-adjusted basis, by Local Authority Area for October 2022 and September and October 2023, together with the corresponding percentage price changes over the last month and year. The ranking figures are based on average house prices in October 2022 and 2023. Line items are shaded in blue in cases where average house prices in the Local Authority Area have experienced record highs in October 2023

Annual change

The average house price in Scotland in October 2023 has increased by some £975, or 0.4%, over the last twelve months, which is 0.4% lower than the 0.8% growth rate seen in September, one month earlier. This is the lowest annual growth rate since March 2019, nearly five years earlier.

In October, Clackmannanshire saw the highest increase in its annual rate of price growth, at 9.9%, but with only 44 sales in the month, contrasted with Edinburgh’s 612, the movements in average price will be unduly impacted by individual transactions, especially when expressed in percentage terms. Moray is in second place, with a more arithmetically significant 97 sales, with an average price gain of 8.3%. In Moray, all property types have seen prices rise over the year, with the largest increase being in semi-detached properties, up from an average £180k in October 2022 to £200k one year later.

At the other end of the scale, the area on the mainland with the largest percentage fall in prices over the last twelve months, for the second month running, was East Ayrshire, at -6.0%. In East Ayrshire, all property types – except for terraces – saw prices fall over the year, with the largest fall being detached homes, down by an average £20k over the last twelve months. At an average £264k, in October 2023, East Ayrshire is ranked 29th out of the 32 local authority areas in Scotland, by way of its detached property values. Despite the fall in the annual rate, 17 of the 32 local authorities were reporting a positive movement in prices over the previous twelve months, compared with 16 in September. However, Edinburgh had the largest fall in prices over the year when measured on a weight-adjusted basis (which takes into account both the number of sales and the nominal fall in average price), which singlehandedly counteracted some 30% of the positive movement in values in the 17 areas with price gains.

Monthly change

In October 2023, Scotland’s average house price fell by some -£650, or -0.3%, which contrasts with the +£750, or +0.3%, change in prices seen in September. This is the sixth monthly fall of 2023: however, it would appear that prices have been gently oscillating over the last five months, with the average price ranging between £223,000 – £224,000 since May 2023.

In October 2023, 12 of the 32 Local Authority areas in Scotland experienced rising prices in the month, four fewer than in September. The area on the mainland with the largest monthly price increase, for the second month, running was Stirling, up by 2.9%. Both detached properties and flats saw an increase in their average prices over the month, with a higher volume of flat sales being in evidence in Stirling at the start of the academic year.

East Renfrewshire tops Table 2 above for the second month in succession, displacing the City of Edinburgh to second place. Both East Renfrewshire and Edinburgh have been in the top position of having the highest average value for properties in five of the last twelve months, with East Lothian taking this position twice.

By way of interest, the highest-priced home to have been sold in Scotland in October was a £1.95 million five-bedroom detached home in Ravelston, Edinburgh, closely followed by a £1.875 million detached property in Milngavie, East Dunbartonshire. As mentioned last month, Milngavie is probably best known for its reservoirs, which supply Glasgow City with its water.

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 October 2023, there were 3 such authorities, down from 6 in September, the three areas being Stirling, Moray and Highland. The first two areas are mentioned above – in Highland the achievement of a record average price was assisted by the October sale of a 4-bedroom single story detached home, overlooking the Camusdarach beach, near Arisaig, for £1.1 million.

Transactions analysis

Figure 2 below shows the monthly transaction count for purchases during the period from January 2007 to September 2023, based on Registers of Scotland (RoS) figures for the Date of Entry (except for September 2023, which is based on RoS Application Dates).

As can be seen, the market in 2007 was almost double the size of the levels taking place from 2008 – 2012, a period which was restricted by the credit crisis in the banking industry. From 2013 onwards, sales began to recover, with the average monthly transaction count reaching 7,027 in 2013. The market continued to grow – albeit slowly – reaching a mini-peak of 8,724 sales per month in 2017.

The pattern of sales during the year can be clearly seen in its various forms from 2010 to 2019. Typically, the year starts with two low sales months in January and February – the troughs on the graph – coinciding with the period of restricted daylight hours and the week-long break taken over the Christmas period. March typically sees a “spring bounce” as the market opens back up, with peaks in sales taking place during the summer. There is usually a small dip in sales during the Autumn, followed by a small flurry of activity in December, as buyers look to be in their “new home” before the New Year.

However, it can be seen that in early 2020, at the start of the pandemic and its associated lock-downs, the market slumped in April 2020, to just 2,537 sales. There was then a slow path to recovery during the remainder of 2020; a peak in transactions in March 2021 to 12,241 sales, being the last month of the LBTT tax holiday in Scotland; and the mildly enhanced market of 2022.

Figure 2. The number of sales per month recorded by RoS based on entry date from 2007 – 2023

This brings us to the current year of 2023 – the relatively high bank rate of 3.5% at the start of the year had an adverse effect on property transactions, with only 5,883 sales for January 2023 being recorded to date by the Registers of Scotland – the lowest January total since 2013. Although the housing market in 2023 did enjoy the traditional spring bounce in transactions that occurs in March, sales volumes from July 2023 onward have been below all previous years since 2013. Over the first ten months of 2023, sales are down by 11.3% compared to the equivalent period in 2022.

Scotland transactions of £750k or higher

Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – October 2023

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 77 such transactions recorded by RoS during the month relating to October 2023. Currently, this is the fourth-highest October total recorded to date, but with RoS processing further data for the month, it may possibly rise to third place in the yearly rankings. October 2020 had the second-highest monthly total of sales over £750k, arising from the “the race for space” which became popular during the latter part of 2020, as buyers searched for larger properties to enable comfortable “working from home”.

Looking at the number of high-value properties sold in the first ten months of each year in Table 3, 2022 is ranked first with 1,030 high-value sales. In second place is 2021- when sales were boosted in March, by the annual “spring-bounce” – with 922 sales in the ten-month period, while 2023, with 847 sales in the ten months, is ranked in third place.

However, there is a clear trend, in that the totals in each of the first ten months of 2023 are lower than a year earlier. In aggregate, the high-value 2023 transactions are currently down on their 2022 equivalent by 18%, compared to a 11% downturn in sales volumes in the market as a whole, indicating that last year’s enthusiasm for the purchase of high-value homes has dissipated.

Edinburgh accounts for 378 of the 847 high-value sales (45%) that have been recorded to date by RoS in 2023, compared to 48% in 2022. Glasgow is in second place with 61 such sales, East Lothian is in third place with 54, six ahead of Fife with 48, East Renfrewshire has 44 and East Dunbartonshire 43.

Heat Map

The heat map below shows the rate of house price growth for the 12 months ending October 2023. As reported above, 17 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 seen in Clackmannanshire, at 9.9 growth, with the largest fall in the year in the Orkney Islands at -14.5%.

How Scotland Compares

Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-October 2023

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–October 2023

Scotland’s Eight Cities

Figure 5. Average house prices for Scotland’s eight cities from August 2022–October 2023

Figure 6. Average house prices for Scotland’s eight cities October 2023

ENDS

Scotland’s house prices continued their climb in November

House Price Index from Walker Fraser Steele

  • East Lothian becomes authority with highest average values
  • Sales of high-value homes in 2022 continue to exceed those in 2021
  • Transaction levels in 2022 match those of 2019
  • Monthly house price change up 0.2%, 6.7% up annually
  • Average Scottish house price now at £224, 644

Table 1. Average House Prices in Scotland for the period November 2021 – November 2022

Note: The Walker Fraser Steele Acadata House Price Index (Scotland) provides the “average of all prices paid for houses”, including those made with cash.

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “Our data this month may, at first glance, look at odds with other published indices issued by lenders but it is important to understand our higher rate of growth for the period includes all property transactions.

“This is particularly crucial in Scotland as a third of these transactions are made in cash. It is also important because it means this third is not as constrained by the cost of mortgage finance.

“Our data is also drawn from the latest available provided by Registers of Scotland so it uses actual completion prices for November, which may have been agreed earlier in the year, as opposed to precompletion valuations or estimates.

“Scotland is not alone in seeing tentative price growth increases, but our analysis makes a clear point of the value of looking beyond mortgage borrowing for a real understanding of what is going on.

“Property across the UK since the start of the pandemic has consistently out-performed inflation – the average house price in November reached £224,644 – an increase of £40,800 since March 2020, which reflects a comparative growth for the period of 22% compared to consumer prices which have grown by 14.9%.

“On a monthly basis, November’s average price grew by £400 or 0.2%, which though slight in the scheme of things, still means the average house price is at a record high for a ninth time in 2022.”

Commentary: John Tindale, Acadata Senior Housing Analyst

The November housing market

Average house prices in Scotland continued to rise during November, although the increase was a modest £400, or 0.2%. Average prices have now reached £224,644, which is some £14,100, or 6.7%, higher than a year earlier. This sets another new record average price for Scotland, the ninth to date in 2022.

Indeed, if we look at the change in values since the start of the pandemic in March 2020 – when the average house price in Scotland was £183,853 – there has been an increase of some £40,800, or 22%, in the average house price to the end of November 2022. This compares favourably with the increase in consumer prices of 14.9%, measured by CPIH, over the same period. Property prices have hence risen in real terms over the last nearly three years.

With the UK-wide annual November headline rates of the Halifax and Nationwide indices at 4.7% and 4.4% respectively, it may be surprising to see Scotland at a higher rate of 6.7%. However, it should be recognized that the lender indices only relate to properties purchased with a mortgage, while 33% of Scotland’s properties are typically acquired with cash. One third of purchases will therefore not necessarily have been influenced by the recent rise in interest rates.

Also of relevance is the fact that the North West and North East regions of England have annual price increases of 12.9% and 13.4% respectively, so Scotland is not alone in seeing rates above those announced by the lenders.

Figure 1. The annual rate of house price growth in Scotland over the period March 2020 to November 2022

The RICS Residential Market Survey for November indicates that activity in the home sales market has continued to weaken, with higher interest rates and a difficult macro-economic outlook taking their toll on buyer sentiment, and indicators on new instructions and agreed sales remaining negative.

The survey did, however, advise that respondents report that, for now, prices continue to edge higher in Scotland – although the pace of growth is significantly softer than earlier in the year. This is in line with our own findings, derived from the price data supplied by RoS, which includes all domestic transactions based on both cash and mortgage sales.

Local Authority Analysis

Table 2 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for November 2021, as well as for October and November 2022, calculated on a seasonal- and mix-adjusted basis. The ranking in Table 2 is based on the local authority area’s average house price for November 2022. Local Authority areas shaded in blue experienced record average house prices in November 2022.

Annual change

The average house price in Scotland in November 2022 has increased by some £14,100 – or 6.7% – over the last twelve months. Although the annual rate of growth has increased marginally in November, up 0.2% on October’s revised 6.5%, the rate of growth has reduced from June’s 10.4%, which now looks as though it will represent the high point of 2022. However, prices continued to climb in November, albeit at a reduced rate compared to June, with Scotland setting another record average house price, of £224,644 in the month, for the ninth time this calendar year.

In November 2022, 29 of the 32 local authority areas in Scotland saw their average prices rise above the levels of twelve months earlier, the same number as in October. The three areas where values fell over the year were, in descending order, Aberdeen City (-8.1%), Scottish Borders (-2.1%) and Inverclyde (0.0%), although in Inverclyde average prices were just £9 lower than they were twelve months previously.

In Aberdeen City, which has fallen seven places over the year to 25th in terms of its ranking of average prices compared to the other 31 local authorities in Scotland, it is detached homes that have experienced the largest fall, from an average £390k in November 2021 to £350k one year later.

The area with the highest annual increase in average house prices in November 2022 was East Lothian, where values have risen by 14.7% over the year. This takes East Lothian to the top of Table 2 in terms of average values, ahead of the City of Edinburgh.

The rise in prices in East Lothian has been assisted by the sale of The Balfour, a 9,000 sq. ft 4-bedroom apartment, being the ground floor of Whittingehame House, Haddington, for £2.4 million.

Technically, The Balfour is classified as a flat, since it shares a common entrance with other apartments to the main building, so this sale becomes the most expensive ‘flat’ to be sold in East Lothian for at least the last five years.

On a weight-adjusted basis, which incorporates both the change in prices and the number of transactions involved, there are six local authority areas in November which accounted for 51% of the £14,100 increase in Scotland’s average house price over the year.

The six areas in descending order of influence are: – Edinburgh (19%); Glasgow (10%); East Lothian (7%); North Lanarkshire (5%); West Lothian (5%); and Fife (5%).

Monthly change

In November 2022, Scotland’s average house price in the month rose by some £400, or 0.2%. This follows October’s rise in prices of £630, but August and September’s decreases of -£290 and -£320 respectively. These two months were the first falls in Scotland’s average house price since June 2021.

In November 2022, 17 of the 32 Local Authority areas in Scotland experienced rising prices in the month, which is one less than the 18 in October. Of the 17 local authorities with price rises in the month, 8 are in the top 16 areas when ranked by price, with 9 being in the lower half of the market.

The distribution of those with price rises is therefore evenly matched between the higher- and lower priced areas in Scotland.

However, if we look only at the areas with price falls, then the top half of the areas by value saw an average fall of -1.1% in the month, while the average for the bottom half by value amounted to -2.5%. So those areas with the highest falls in the month tended to have the lowest average values.

The largest increase in average prices on the mainland in November was, for the second month running, Clackmannanshire, up by 5.6%. This month the increase in the average price was helped by the sale of a four-bedroom detached home, with stables and a paddock, just to the east of Dollar, which is evenly located between Glasgow (36 miles) and Edinburgh (37 miles).

It was put on the market for offers over £1 million – it sold for £1.21 million – becoming the second-highest priced sale in Clackmannanshire since August 2019.

Peak Prices

Each month, in Table 2 above, the local authority areas which have reached a new record in their average house prices are highlighted in light blue. In November, there are 8 such authorities, down from the 12 in October. Scotland itself has also set a new record average house price of £224,644 in the month.

Scotland transactions of £750k or higher

Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – November 2022

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 123 such transactions recorded by RoS during the month, with 78 relating to November 2022 and 45 to October 2022, increasing the number recorded to date in 2022 to 1,084. The total recorded in 2021 to the end of November amounted to 1,020, so it is looking extremely likely that 2022 will be establishing a new high for such sales in a year – there are already eight months in which the 2022 totals are either higher than or equal to one year earlier.

As reported last month, these statistics suggest that the “lifestyle changes” associated with the pandemic, of “working from home” and the “race for space”, continue to be important features of the current housing market, even if the prominence of the Covid restrictions are beginning to wane. This “race for space” continues to result in strong competition for high-value homes, which are in relatively short supply, causing prices to continue to creep upwards at the top-end of the market.

The six authorities with the largest number of the 1,084 high-value sales that have been recorded to date in 2022 are: Edinburgh (530); Glasgow City (70); East Lothian (65); Fife (56); East Renfrewshire (42); and finally Perth and Kinross (41). From these figures it can be seen that in 2022, the City of Edinburgh accounts for just under half of this sector of the housing market.

Transactions analysis

Figure 2 below shows the monthly transaction count for purchases during the period from January 2007 to November 2022, based on RoS (Registers of Scotland) figures for the Date of Entry (November 2022 totals are based on RoS Application dates).

The graph starts in 2007, which was something of an exception, with close to 150,000 domestic property sales in the calendar year. The 2007 sales total is the largest seen during the last 18 years, although the period from 2004 to 2006 came close, with an average 139,000 sales on an annual basis.

However, during 2008 the banking industry began to suffer its credit crisis, with home loans becoming difficult to obtain, especially for first time buyers. Accordingly, the number of housing transactions fell to approximately 70,000 per year over the period from 2009 to 2012.

Normality was slowly restored from 2013, with sales rising to a yearly average of 87,500 over the period from 2013 to 2015, rising to an average 102,000 sales per annum from 2016 to 2019.

The effect of the Covid pandemic – which started in March 2020 – can be clearly seen on the graph. Housing transactions in April 2020 plummeted with the arrival of the pandemic, to be followed by a slow rise in sales as confidence began to return. Then followed a period when sales exceeded previous levels, from September 2020, as lifestyle changes and the LBTT tax-holiday pushed up demand – especially for properties with space to allow for working from home.

Figure 2. The number of sales per month recorded by RoS based on entry date from 2007 – 2022

In Figure 2, three peaks can be seen after March 2020: in October 2020 (pent-up demand from the low transaction levels in 2020) and March and June 2021 (LBTT tax-holidays encouraging sales). In the first eleven months of 2022, transaction levels have averaged 8,635 sales per month, which closely matches the average 8,610 sales per month recorded in the first eleven months of 2019 – the last full year prior to Covid.

Heat Map

The heat map below shows the rate of house price growth for the 12 months ending November 2022. As reported above, 29 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year, the three exceptions being Aberdeen City, the Scottish Borders and Inverclyde. The highest increase on the mainland over the twelve months to November 2022 was in East Lothian at 14.7%. 10 of the 32 local authority areas had price growth of 10.0% or higher – three more than in October 2022.

Comparisons with Scotland

Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-November 2022

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–November 2022

Scotland’s Eight Cities

Figure 5. Average house prices for Scotland’s eight cities from September 2021–November 2022

Figure 6. Average house prices for Scotland’s eight cities November 2022

ENDS

Scotland’s average house price decreased in August

August House Price Index from Walker Fraser Steele:

Scotland’s average house price decreased in August by £225

  • But 31 Local Authorities have seen prices rise over the year
  • Shetland Islands have highest annual growth rate at 19.6%
  • Larger number of high-value sales in 2022 than 2021
  • Average house price £224,117, down 0.1% on July, 7.6% up annually

Table 1. Average House Prices in Scotland for the period August 2021 – August 2022

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “The average price paid for a house in Scotland in August 2022 was £224,117 – a slight decrease of 0.1%, from the price established in July.

“It is only significant in so far that it is the first decrease in Scotland’s monthly average house price since June 2021, but it is important to remember that on an annual basis, the price is some £15,900, or 7.6%, higher than it was in August 2021.

“One reason for the continued resilience is the number of sales recorded over £750k. Our data shows that some 82 sales were recorded at values over £750k during August 2022. We think this figure will increase as further sales for the month are processed by the Registers of Scotland.

“What this number of sales over £750k tells us is that “working from home” and the “race for space” continue to be important features of the current housing market, even if the prominence of the Covid restrictions are beginning to wane.

“Properties of this nature command more space to accommodate new ways of living but remain in short supply which again supports the average house price – even in the face of some meaningful economic headwinds thanks to global inflationary pressures.

“How resilient prices are over the coming months remains to be seen. Certainly, some of the recent domestically inspired spikes to mortgage affordability may yet dampen buyer enthusiasm, but today’s interventions from the new Chancellor are designed to stabilise the cost of borrowing – and there remains a shortage of desirable property.”

Commentary: John Tindale, Acadata Senior Housing Analyst

The August housing market

The average price paid for a house in Scotland in August 2022 was £224,117. This represents a marginal fall of £224, or -0.1%, from the price established in July, the first fall in Scotland’s monthly average house price since June 2021.

Although the average price fell in the month, on an annual basis the price is some £15,900, or 7.6%, higher than it was in August 2021. This annual rate has slowed from the 10.6% growth seen in June, but that month was assisted by a near £3,000 fall in prices which occurred twelve months earlier in June 2021, meaning that the base point for measuring June’s growth rate had started from a particularly low level.

As Figure 1 below shows, since the start of this year the average house price growth in Scotland has been oscillating on a bi-monthly basis, so the fall in the August rate was not unexpected.

Figure 1. The monthly rate of house price growth in Scotland over the period August 2021 to August 2022

As shown in Table 2 sales of high-value properties in the first eight months of the year are at an all-time high, with no indications that the pace of such sales is diminishing. This would suggest that the post-Covid lifestyle changes associated with “working from home” and a “race for space” remain as motivation for would be home-movers, with competition for the right property continuing to keep prices high.

The commentary in this release relates to the August housing market in Scotland. This does of course pre-date the somewhat remarkable events of September and October, with a Mini-Budget having been delivered on 23rd September and a new Chancellor being installed on 13th October.

As noted in this release, the housing market has shown considerable resilience over recent months, in spite of predictions otherwise. Although interest rates have been edging up, it is clear there is still considerable buying power and appetite in the market. Our task will be to report on what happens to completion prices based on cash and mortgaged transactions across Scotland. There will be much on which to reflect.

Transactions analysis

Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to August 2022, based on RoS (Registers of Scotland) figures for the Date of Entry (August 2022 totals are based on RoS Application dates).

The effect of the Covid pandemic – which started in March 2020 – can be clearly seen from the graph. Housing transactions in April 2020 plummeted with the arrival of the pandemic, to be followed by a slow rise in sales as confidence began to return. Then followed a period when sales exceeded previous levels, from September 2020 to March 2021, as lifestyle changes and the LBTT tax-holiday pushed up demand – especially for properties with space to allow for working from home.

The March 2021 peak is also clearly visible, which coincided with the last month of the LBTT tax-holiday. The final month typically creates a peak in transactions, as purchasers rush to take advantage of the tax-holiday before the end of the month, after which time the tax savings come to an abrupt halt.

Sales from June 2021 onward also tended to be higher than during the previous five years (2015 – 2019), as demand for larger properties with space and potential holiday lets continued to stimulate the market. It is only from the start of 2022 that demand appears to have weakened marginally, with sales from March 2022 to July 2022 no longer exceeding those of the previous years, although Table 2 on the next page indicates that the demand for properties priced in excess of £750k continues to be strong.

In the graph below, the August 2022 total shows a small increase in transactions compared to July 2022, but the figure for the month remains an estimate, so at this stage not too much weight should be given to the predicted rise in sales.

RICS (Royal Institution of Chartered Surveyors), in its August 2022 Residential Market Survey, is continuing to point to an easing in sales market activity, with metrics on demand and sales remaining in negative territory over the month. RICS do however add that that the current level of market appraisals being undertaken is similar to that seen twelve months ago, suggesting the tight supply backdrop is unlikely to change dramatically in the near future – this remains consistent with a still reasonably solid degree of upward movement in house prices for the time being.

Figure 2. The number of sales per month recorded by RoS based on entry date (RoS applications date for August 2022), for the period 2015 – 2022. (Source: Registers of Scotland.)

Scotland transactions of £750k or higher

Table 2. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – August 2022

Table 2 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.

Table 2 shows that there were 82 sales in excess of £750k during August 2022, and we anticipate that this total will increase by another twenty-plus in number, as further sales for the month are processed by the Registers of Scotland. If this proves to be the case, then six of the eight months in 2022 will have seen a higher number of sales in excess of £750k than in 2021, which was itself ahead of all previous years. Certainly, looking at the first eight months of 2021, for comparative purposes, there were 692 sales above £750k, which have been exceeded by the 710 sales seen in 2022.

These statistics suggest that the “lifestyle changes” associated with the pandemic, of “working from home” and the “race for space”, continue to be important features of the current housing market, even if the prominence of the Covid restrictions are beginning to wane.

The five authorities with the largest number of the 710 high-value sales that have been recorded to date in 2022 are: Edinburgh (360); Glasgow City (46); Fife (39); East Lothian (36); and finally East Renfrewshire (24). From these figures it can be seen that in 2022, Edinburgh accounts for just over half of this sector of the housing market.

Local Authority Analysis

Table 3. Average House Prices in Scotland, by local authority area, comparing August 2021, July and August 2022

Table 3 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for August 2021, as well as for July and August 2022, calculated on a seasonal- and mix-adjusted basis. The ranking in Table 3 is based on the local authority area’s average house price for August 2022. Local Authority areas shaded in blue experienced record average house prices in August 2022.

Annual change

The average house price in Scotland increased by some £15,900 – or 7.6% – over the last twelve months, to the end of August. This is a near £3,100 decrease over the £19,000 growth in prices seen in the twelve months to the end of July 2022 – and represents the second month in a row in which the increase in prices on an annual basis has slowed.

In August 2022, 31 of the 32 local authority areas in Scotland saw their average prices rise over the levels seen twelve months earlier, the same number as in July. The one area that saw values fall over the year was East Lothian, where prices have dropped by 1.9%. In East Lothian, it is the average price of detached properties that have fallen the most over the past year, from an average £520k in August 2021 to £490k in August 2022.

The area with the highest annual increase in average house prices in August 2022 was the Shetland Islands, where values have risen by 19.6% over the year. However, as regular readers of our reports will know, the Islands frequently have the largest movement in average house prices due to the small number of transactions that take place each month, with just 21 sales in August. On the mainland, the authority with the highest increase over the year was – for the fifth month in succession – Argyll and Bute, at 17.1%. Interestingly, in August, it was “Flats” that saw the largest increase in average prices in Argyll and Bute, assisted by the purchase of a ground floor conversion of a Victorian villa in Helensburgh for £560k.

On a weight-adjusted basis, which incorporates both the change in prices and the number of transactions involved, there are six local authority areas in August that accounted for 49% of the £15,900 increase in Scotland’s average house price over the year. The six areas in descending order of influence are: – Glasgow (11%); Edinburgh (11%); South Lanarkshire (10%); Highland (7%); Fife (5%); and West Lothian (5%).

Monthly change

In August 2022, Scotland’s average house price in the month fell by some £225, or -0.1%. This is the first fall in the average house price in a month since June 2021.

In August 2022, 20 of the 32 Local Authority areas in Scotland experienced rising prices in the month, the same number as in July. The largest increase in average prices in August was seen, for the second successive month, in Inverclyde, up by 7.0%. Last month we reported that prices in July in Inverclyde had been assisted by the purchase of an upmarket flat in Greenock. This was a lower-floor conversion of a traditional 5-bedrom 1870 Victorian blonde sandstone property, which sold for £370k. In August, it transpires that a further upper-floor conversion was sold in the same street for £410k, which helped secure Inverclyde’s position as having the highest increase in average prices in the month.

At the other end of the scale, the lowest increase in average prices in August was in Stirling, at -4.9%. The third-highest priced sale of the year in Stirling had been included in the statistics for last month – a detached home in Croftamie, a village located some 25 miles to the north of Glasgow, which sold for £1.4 million. But, having dropped out of the statistics this month and with no similar property taking its place, average prices in Stirling in August dropped accordingly.

Peak Prices

Each month, in Table 3 above, we highlight in light blue the local authority areas which have reached a new record in their average house prices. In August there are 7 such authorities, down from the 11 seen in July. With average prices in Scotland falling in August we should advise that Scotland itself is no longer at a record price, the first time this has happened this year.

Heat Map

The heat map below shows the rate of house price growth for the 12 months ending August 2022. As reported above, 31 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year, the one exception being East Lothian. The highest increase on the mainland over the twelve months to August 2022 was in Argyll and Bute at 17.1%. 14 of the 32 local authority areas had price growth in excess of 10.0% – two less than in July 2022.

Comparisons with Scotland

Figure 3. Scotland house prices, compared with England and Wales, Wales, North East and North West for the period January 2005-August 2022

Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, Wales, North East and North West for the period January 2005–August 2022

Scotland’s Eight Cities

Figure 5. Average house prices for Scotland’s eight cities from June 2021–August 2022

Figure 6. Average house prices for Scotland’s eight cities August 2022

Scotland’s house price growth continues to 9.1% Walker Fraser Steele’s latest House Price Index

Walker Fraser Steele’s latest House Price Index

  • 11 Local Authorities in July experiencing record average prices
  • Argyll and Bute has highest annual growth rate at 18.1%
  • Semi-detached properties have highest price growth over the year
  • Average Scottish house price now £224,035, up 0.8% on June, 9.1 annually

Table 1. Average House Prices in Scotland for the period July 2021 – July 2022

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “The average price paid for a house in Scotland in July 2022 is £224,035, establishing yet another record price for the country – the thirteenth occasion that this has happened in the last thirteen months.

This price is some £18,600 higher than that seen in July 2021, indicating that prices have risen by 9.1% on an annual basis. This annual rate has slowed from the 10.6% growth seen in June, but that month was assisted by a near £3,000 fall in prices which occurred twelve months earlier in June 2021, meaning that the base point for measuring June’s growth rate started from a particularly low level. On a monthly basis, prices in July increased by some £1,725, or 0.8%, which was close to £500 higher than the increase seen in June – continuing the bi-monthly oscillation in prices in 2022 that can be seen in Table 1 above.

Figure 1. The average house price in Scotland over the period July 2020 to July 2022

While prices continue to increase, there is some evidence that the number of housing sales in Scotland is beginning to slow – although a number of surveyors in Scotland believe this to be a regular feature of June and July’s housing market, coinciding as it does with the school holidays, when families are likely to be distracted by matters other than buying a property. It is therefore difficult to draw conclusions from the observed shortfall of sales in June, and to a lesser extent July.

Looking at Table 2 below, which illustrates the change in prices by property type, there is a far smaller difference between the property types in July 2022 than there had been in March 2022.

March 2022 shows a ‘pandemic-led’ increase in prices with detached properties having the highest growth in prices, and flats the lowest. However, in July this position has changed, with semi-detached properties seeing the largest increase in prices while detached properties are second lowest.

The change in growth rates of the different property types highlighted in Table 2 may suggest that the importance of ‘lifestyle-changes’ in the decisions involved in buying a property have shifted over the last few months, as the pandemic becomes less of an influence on peoples’ lives. Or alternatively it may just reflect a change in the mix of those who have purchased properties during the school holidays. We will have to wait and see what happens when the schools return this autumn, and families contemplate their next move.

Transactions analysis

Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to July 2022, based on RoS (Registers of Scotland) figures for the Date of Entry. (July 2022 totals are based on RoS Application dates.)

It can be seen that the June 2022 total is the second lowest transaction count of the eight years shown in Figure 2, with only the June 2020 total being lower. (June 2020 was only three months after the start of the pandemic). Although the July 2022 total shows a small increase in transactions compared to June 2022, the current figure for the month remains an estimate, so at this stage not too much weight should be given to the predicted rise in sales.

RICS (Royal Institution of Chartered Surveyors), in its July 2022 Residential Market Survey, is pointing to an easing in sales market activity, with metrics on demand and sales remaining in modestly negative territory over the month. RICS add that for the time being at least – underpinned by the low levels of supply available for purchase – prices continue to rise across all parts of the UK.

Figure 2. The number of sales per month recorded by RoS based on entry date (RoS applications date for July 2022), for the period 2015 – 2022

Scotland transactions of £750k or higher

Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – July 2022

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.

Table 3 shows that there were 81 sales in excess of £750k during July 2022, and we anticipate that this number will increase as further sales for the month are processed by the Registers of Scotland. It is however doubtful that the July 2022 total will exceed the July 2021 total of 120 sales, which again suggests a slight cooling in the high-value sales market, consistent with the RICS Residential Market Survey quoted earlier. However, the total for July 2022 of 81 high-value sales still exceeds all the prior years’ July totals, except for 2021, indicating that the “lifestyle changes” associated with the pandemic – “working from home” and the “race for space” – are still features of the current housing market, even if their prominence is beginning to wane. This, as discussed on page 7, has resulted in strong competition for the properties that meet these requirements, with substantial price rises still being experienced at the top-end of the market.

A similar picture can be discerned from looking at the totals for the eight years covered by Table 3 above. It is clear that after seven months, the 2022 total already exceeds each full year from 2015 to 2018, with 2019 highly likely to be surpassed next month, and 2020 following suit shortly thereafter. It can also be seen that the sum of the first seven months of 2021 amounts to 590 sales, meaning that 2022 is not too far behind the previous year’s total at the same point in the year.

The five authorities with the largest number of the 578 high-value sales that have been recorded to date in 2022 are: Edinburgh (294); Glasgow City (37); Fife (32); East Lothian (28); and finally East Renfrewshire (20). From these figures can be seen that in 2022, Edinburgh accounts for just over half of this sector of the housing market

Local Authority Analysis

Table 4. Average House Prices in Scotland, by local authority area, comparing July 2021, June and July 2022

Table 4 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for July 2021, as well as for June and July 2022, calculated on a seasonal- and mix-adjusted basis. The ranking in Table 4 is based on the local authority area’s average house price for July 2022. Local Authority areas shaded in blue experienced record average house prices in July 2022.

Annual change

The average house price in Scotland increased by some £18,600 – or 9.1% – over the last twelve months, to the end of July. This is a near £2,800 decrease over the £21,400 growth in prices seen in the twelve months to the end of June 2022 – but we were advising last month that prices in June 2021, i.e., one year earlier, had fallen by £3,000 from May 2021, so the base point for measuring annual changes in value was starting from a low level.

In July 2022, 31 of the 32 local authority areas in Scotland saw their average prices rise over the levels seen twelve months earlier – the sole exception being Inverclyde, where prices fell by -1.0. Inverclyde currently has the lowest average property value of the 32 local authority areas in Scotland, despite it having experienced a 7.4% increase in average prices in the month – discussed in more detail below.

The area with the highest annual increase in average house prices in July 2022 was Argyll and Bute, where values have risen by 18.1% over the year. This is the fourth month in succession that Argyll and Bute has recorded the highest annual change in prices, having been assisted in this process by a number of high-value sales achieving prices above their guide levels.

This occurred again in July, with the sale of a four-bedroom shipping magnate’s villa overlooking the Clyde, having an asking price of £650,000 but selling for £850,000. This is a classic example of how homes in attractive locations – this time in Helensburgh – can attract competitive bids, resulting in a significantly higher price for the property under offer.

In Table 4, it is noticeable that the top eight local authorities by value have all seen their average prices increase in the month, suggesting that the desire to move to larger properties in these areas has continued in Scotland over the summer months, despite the school holidays.

On a weight-adjusted basis, which employs both the change in prices and the number of transactions involved, there are five local authority areas in July that accounted for 44% of the £18,600 increase in Scotland’s average house price over the year. The five areas in descending order of influence are: – Edinburgh (13%), Glasgow (12%); South Lanarkshire (9%); Perth and Kinross (5%) and Highland (5%).

Monthly change

In July 2022, Scotland’s average house price in the month rose by some £1,730, or 0.8%, continuing the pattern of minor upward oscillations in property values on a monthly basis. The average price in Scotland now stands at £224,035, which sets a record level for the nation for the thirteenth month in succession.

In July 2022, 20 of the 32 Local Authority areas in Scotland experienced rising prices in the month, two more than in June. The largest increase in average prices in July, of 9.0%, was seen in Na h-Eileanan Siar, but we frequently make the point that the Islands have few sales in a month – in July there were just 12 in the Western Isles – which tends to result in large movements in average prices.

On the mainland, the highest increase in prices was in Inverclyde, up 7.4% in the month. Average prices in Inverclyde were assisted in the month by the purchase of an upmarket flat, in Greenock, being a lower conversion of a traditional 1870 Victorian blonde sandstone property, with 5 bedrooms, which sold for £370k – the second highest priced flat sold in Inverclyde in the calendar year.

At the other end of the scale the lowest increase in average prices in July, on the mainland, was Dundee City, at -3.7%. A number of new homes had been purchased in the Broughty Ferry area of Dundee earlier in the year – but the number sold diminished in July, resulting in the fall in average prices in the area.

Peak Prices

Each month, in Table 4 above, we highlight in light blue the local authority areas which have reached a new record in their average house prices. In July, there are 11 such authorities, two less than in June. We can also add that Scotland itself has set a record average price in July 2022 – the seventh of this calendar year.

Heat Map

The heat map below shows the rate of house price growth for the 12 months ending July 2022. As reported above, 31 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year, the one exception being Inverclyde. The highest increase over the twelve months to July 2022 was in Argyll and Bute at 18.1%. 16 of the 32 local authority areas had price growth in excess of 10.0% – three less than in June 2022.

Comparisons with Scotland

Figure 3. Scotland house prices, compared with England and Wales, Wales, North East and North West for the period January 2005-July 2022

Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, Wales, North East and North West for the period January 2005–July 2022

Scotland’s Eight Cities

Figure 5. Average house prices for Scotland’s eight cities from May 2021–July 2022

Figure 6. Average house prices for Scotland’s eight cities July 2022

Scottish house prices rise again in February to an annual 8.2%

  • Shortage of housing stock continues to support prices
  • Scotland’s monthly rate of 1.5% is highest since August
  • Private annual rental growth is at highest rate since records began, encouraging buy-to-let investment
  • Average Scottish House price in February 2022 is £218,702, a monthly increase of 1.5% & annual increase of 8.2%

Heat Map

Table 1. Average House Prices in Scotland for the period February 2021 – February 2022

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “Scotland continues to see record average house price growth with the average price paid for a house in February this year reaching £218,702 – a price £16,600 higher than at the same time last year. It continues the trend from January and, on a monthly basis, this means prices in February rose by 1.5% – the highest increase in a month since August last year.

“As a piece of context, in February this year, all the regions in England and Wales established new record average house price levels, but it is fair to say that the Scottish property market has robustly withstood one of the most seismic events in living memory in the past couple of years.

“The reasons for this strong performance remain constant across the UK. We are still seeing the results of people choosing to change the way in which they work and where they choose to do this. While inflation and interest rates are rising (albeit it at different paces), we still enjoy relatively low borrowing costs. The supply of desirable property remains constrained so there is a lot of competition for the most desirable property.

“It seems that the pandemic’s impact on our ability to spend, which includes disposable income for socialising and holidays, has meant people have saved for more fundamental things such as a house purchase. Also, the rise in house prices during the period means that existing homeowners have benefitted from an increase in the equity in their homes meaning they can move up the ladder.”

Commentary: John Tindale, Acadata Senior Housing Analyst

The February housing market

The average price paid for a house in Scotland in February 2022 was £218,702, which sets a record price for the country – this is the seventh occasion that this has happened in the last twelve months.

This price is some £16,600 higher than that seen in February 2021, indicating that prices have risen by 8.2% on an annual basis. This rate is also some 1.1% up on the 7.1% recorded in December 2021, with both January and February of 2022 having witnessed an increase in house prices.

On a monthly basis, prices in February 2022 rose by 1.5%, or around £3,200. This is the highest increase in a month since August 2021.

Figure 1. The average house price in Scotland over the period February 2020 to February 2022 with trendline

Scotland is not alone in seeing house prices continuing to rise. In February 2022, all nine GOR regions in England and Wales established new record average house price levels, although only Wales had an annual growth rate higher than that of Scotland, at 8.9%.

So what is causing this ongoing upward movement in prices, particularly at a time when many commentators had been expecting to see a slowing in the growth rate, as increased cost of living pressures begin to bear down on consumers?

As we reported last month, in general terms we are still living with the effects of the pandemic, and the “lifestyle” changes this has brought about – in particular the “Work from Home” edict has encouraged many to move to larger premises with outdoor facilities – the so-called “Race for Space”.

There is still high demand for such homes, but supply is limited, so there continues to be strong competition for the properties that do come onto the market, with resultant price increases.

Additionally, the ONS advises that private rental prices in Scotland have grown by 2.6% in the 12 months to February 2022, which is the highest annual growth rate for Scotland since records began in 2012.

If this figure looks low, we should point out that the ONS private rental index not only measures the change in newly advertised rental prices, but also reflects price changes for all existing private rental properties.

This increase in rental growth rates is encouraging some investors to consider purchasing buy-to-let properties, adding to the already buoyant demand for homes that currently exists.

Transactions analysis

Monthly transaction counts

Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to February 2022, based on RoS (Registers of Scotland) figures for the Date of Entry. (February 2022 figures are based on RoS Application dates.)

The graph shows that of the eight years on display, all – bar 2020 and 2022 – have February as being the month with the lowest transaction count of the year.

This in part is a knock-on effect from the Christmas holidays, when estate agents are often closed from Christmas Eve to the New Year – with the Date of Entry on completion of the sale often taking five to six weeks from the date at which the property was first put on the market.

In part, it is also due to the reduced daylight hours at the turn of the year, which restricts would-be buyers from visiting prospective properties.

If we remove the pandemic-related years 2020 – 2022 from our calculations, then the average number of sales in February for the seven years 2013 – 2019 amounts to 5,340 transactions, compared to August, which has the maximum number of sales of any month at an average 9,368 transactions – a 75% increase on February.

Our monthly statistics also show that there is a seasonal variation in the prices being paid across the year, with February typically seeing a 2.5% reduction in the average price paid, and the highest prices typically being achieved in September/October when prices are some 2.0% higher than average.

Allowing for the five-to-six weeks’ time span from putting a home up for sale to the Date of Entry, this will mean that generally the lowest prices are accepted for a property in December / January, and the highest prices are often achieved in August / September. In our house price calculations, we adjust the data to take these known seasonal variations into account.

Figure 2. The number of sales per month recorded by RoS based on entry date (RoS applications date for February 2022), for the period 2015 – 2022. (Source: Registers of Scotland.)

Scotland transactions of £750k or higher

Table 2. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – February 2022

Table 2 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.

Table 2 shows that there were 39 sales in excess of £750k during February 2022, and we anticipate that this number will increase as further sales for the month are processed by the Registers of Scotland. However, as discussed earlier, February typically has the lowest number of property sales in the year, so there should not be too much concern about the relatively low number of high-value sales that occurred in the month.

The seven authorities with the largest number of the 119 high-value sales that have been recorded to date in 2022 are: Edinburgh (59); Glasgow City (11); Fife (8); East Lothian (5); East Dunbartonshire (4); East Renfrewshire (4); and finally Perth and Kinross (4).

The 59 high-value sales in Edinburgh amount to 4.6% of the total 1,292 sales that have been recorded in the capital in 2022 to date. This compares to a figure of 1.1% to the end of February – which the 119 high-value sales represent – when compared to Scotland’s total number of 11,041 transactions recorded by the Registrar.

The high-value ratios for the remainder of the seven authorities listed above are – East Lothian 2.6%; East Dunbartonshire 2.4%; East Renfrewshire 2.1%; Perth and Kinross 1.3%; Fife 1.1%; and finally, Glasgow City 0.9%.

Local Authority Analysis

Table 3. Average House Prices in Scotland, by local authority area, comparing February 2021, January 2022 and February 2022

Table 3 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for February 2021, as well as for January and February 2022, calculated on a seasonal- and mix-adjusted basis.

The ranking in Table 3 is based on the local authority area’s average house price for February 2022. Local Authority areas shaded in blue experienced record average house prices in February 2022.

Annual change

The average house price in Scotland has increased by some £16,600 – or 8.2% – over the last twelve months, to the end of February. This is a £1,300 increase over the revised £15,300 growth in prices seen to the end of January 2022, and represents approximately half of the annual average gross pay of those working in Scotland in 2020/2021.

In February 2022, 30 of the 32 local authority areas in Scotland saw their average prices rise over the previous twelve months. The two areas with price falls compared to one year earlier were Clackmannanshire and Aberdeen City.

In Clackmannanshire all property types, excepting terraces, saw a fall in their average values, but the authority has the lowest number of property sales per month of all the Local Authorities on the mainland, which tends to produce volatile movements in the average price, especially when measured in percentage terms.

In Aberdeen City, it is the average price of terraces and flats that have seen a fall over the last twelve months. However, in Aberdeen, there is a strong correlation between house prices and the price of crude oil, and as suggested last month, we anticipate that property values will begin to increase relatively soon, following the recent dramatic rise in oil prices.

The area with the highest annual increase in average house prices in February 2022 was the Orkney Islands, where values have risen by 28.6% over the year: however, like Clackmannanshire this statistic is based on a low volume of sales (13 transactions in the Orkney Islands in February 2022).

On the mainland, the highest rise in prices occurred in Inverclyde, up by 16.5% over the year, this statistic having been assisted by the February purchase of the second-highest priced home in Inverclyde of the last twelve months.

The property concerned is a five-bedroom detached home in Kilmacolm, located approximately 15 miles to the west of Glasgow, which sold for £1.45 million.

Monthly change

In February 2022, Scotland’s average house price in the month rose by some £3,200, or 1.5%, which is the highest increase of the last six months. The average price of a home in Scotland now stands at £218,702, which sets a new record level for the nation for the seventh time in the last twelve months.

In February 2022, 21 Local Authority areas in Scotland experienced rising prices in the month, the same number as one month earlier.

The largest increase in average prices in February, of 9.3%, occurred in East Renfrewshire. The price of all property types, except for flats, increased in East Renfrewshire in February, with the highest increase occurring in detached properties, up from an average £425k in January to an average £495k one month later.

These dramatic changes in price are frequently seen in February, due to the low overall level of sales in the month. In this instance, the average price for East Renfrewshire has been elevated by the purchase of the area’s most expensive detached property of the last twelve months for £1.95 million.

The property, which is located in Giffnock, is some 6 miles to the south of Glasgow centre and is less than half a mile from Whitecraigs railway station, with a direct service into Glasgow Central station, having a journey time of approximately 20 minutes. Giffnock is frequently referred to as being amongst the most affluent areas in Scotland.

Peak Prices

Each month, in Table 3 above, we highlight in light blue the local authority areas which have reached a new record in their average house prices. In February there are 18 such authorities, three more than in January. We can also add that Scotland itself has set a record average price in February 2022 – the second of the year.

Heat Map

The heat map below shows the rate of house price growth for the 12 months ending February 2022. As reported above, all but two of the 32 local authority areas in Scotland are reporting an increase in their house values over the last year. The two areas with negative growth are Clackmannanshire and Aberdeen City, where prices over the year have fallen by -2.8% and -0.9% respectively. The highest increase over the twelve months to February 2022 was in the Orkney Islands at 28.6%, followed by Inverclyde at 16.5%.

Comparisons with Scotland

Figure 3. Scotland house prices, compared with England and Wales, Wales, North East and North West for the period January 2005-February 2022

Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, Wales, North East and North West for the period January 2005–February 2022

Scotland’s Seven Cities

Figure 5. Average house prices for Scotland’s seven cities from December 2020–February 2022

Figure 6. Average house prices for Scotland’s seven cities February 2022