Midlothian becomes fifth local authority with average property prices above £300,000
Average Scottish house price now £223,525, up 1.4% on February, up 1.9% annually
Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “In March, average property prices in Scotland increased by 1.4%, or almost £3,000, following a five month decline.
“This was a far stronger performance than that witnessed in the English and Welsh markets. Scotland’s average house price is currently just over £223,500, which is about £300 less than its high price from June 2023.
“This significant turnaround speaks volumes about the negligible movement we have seen in recent months.
“Four authorities—Midlothian, Argyll and Bute, Falkirk, and Inverclyde—achieved new heights in terms of their regional average values and the total number of local authorities reporting rising prices was twenty-one, the highest since May of last year – another clear and welcome sign that the market is beginning to stabilize.
“Of particular note is the 1.5% increase for Midlothian which made it the fifth local authority with average property prices above £300,000.
“It’s too early to assume the cost of living pressures are abating but mortgage pricing has been keen over the last couple of months as lenders fight for borrowers. With a general election due this year, we know housing is a key issue for voters and we may yet see some further promises made to buyers and owners before a vote later this year. That would give further impetus to this positive trajectory.”
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Housing market commentary
After falling for five months in a row, average house prices picked up in March by 1.4%, some £3,000, and a positive outcome compared to markets in England and Wales. Scotland’s average house price now stands a little above £223,500, that is within £300 of its peak level reached in June 2023. The seemingly marked turn-round speaks volumes about the narrow tramlines within which the market has moved over the past year.
Figure 1. Weakness in prices appears to have ended
Scotland’s brief flirtation with annual price falls last December has been short-lived. The market swung firmly back into positive territory in March, climbing by more than £4,000 and 1.9% from a year earlier, as Figure 1 shows. This is the strongest performance in more than a year and compares favourably with that seen south of the border over recent months.
Table 1. Average prices in Scotland for Mar 2023 – Mar 2024
Local Authority prices
Table 2. How prices in March 2024 compare
Twenty one local authorities experienced rising prices in the month – the highest number since May last year and a further sign that the housing market is stabilising. Higher values helped four authorities – Midlothian, Argyll and Bute, Falkirk and Inverclyde – to reach new peaks.
The five most expensive local authorities all reported higher prices in March, albeit marginally so in the case of East Lothian. A 1.5% increase for Midlothian made it the fifth local authority with average property prices above £300,000.
Figure 2. How prices have changed between March 2023 and March 2004, by local authority
As can be seen from the heat map, in March the vast majority of local authorities (24) reported stronger prices than a year ago, the highest number since February 2023.
Inverclyde reported a double-digit percentage increase in prices over the year for the second month in a row. That said, we would not read too much into these figures, distorted as they are by a period of price weakness the year earlier.
Transactions analysis
Figure 3. Monthly sales over the most recent year compared with a year earlier
The housing market has been lacklustre over much of the past year. For 2023 as a whole, sales totalled 91,600 properties, which is 12% down on 2022 and not much above the Covid-induced lows of 2020.
But the headwinds have eased over the past few months, helped by more attractive mortgage pricing and easing cost-of-living pressures. As can be seen in Figure 3, monthly sales are no longer lagging materially below year-earlier levels.
A positive shift in market sentiment helped lift sales in January marginally above those in January 2023 and sales for both February and March appear to be closely tracking year-earlier levels. Sales of property in the capital and of properties worth more than £750,000 already appear to be modestly outpacing the corresponding 2023 numbers.
For the time being, it is hard to know whether this is just a degree of stability returning to the market or a more significant recovery story.
Sales are still down on pre-Covid levels and market confidence is likely to be sensitive to changing market expectations of interest rates and political uncertainties.
However, without doubt analysts’ expectations of significant price falls across Scotland, Wales and England in 2024 have fallen away over the past few months and forecasts have been revised upwards to suggest Scotland may see modest price growth over the year.
While there remain uncertainties around interest rates and mortgage pricing, there is a general sense that the worst is behind us. The pent-up demand that built up over 2023 and into 2024 is beginning to come through and that should be reflected in prices.
There may also be a move by the UK government to help support first-time buyers in the run-up to the General Election which could add further momentum.
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
January’s housing market
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
No change in Scotland’s house price over last twelve months
· East Renfrewshire prices rise by 12.0%
· Dumfries and Galloway prices fall by -5.4%
· Transactions down by 12.3% on 2022 levels
Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “At a national level, the picture this month shows Scotland’s average house price in November 2023 barely changed over the last year. However, it also reveals some significant regional differences in average house prices over the same period.
“This is remarkable when you consider the affordability pressures experienced by the housing market since the autumn of ’22. The average house price now is just -£16 lower than twelve months earlier and stands at £222,637.
“The reality is that regional hotspots like East Renfrewshire which enjoyed price gains of 12% during the period have been offset by dips elsewhere, such as Dumfries and Galloway which has endured a fall of -5.4%.
“We have also seen variance in property types. Over the last year, the average price of detached properties has increased by +1.2%, and flats by +0.5%, while semi-detached and terraced properties have fallen by -1.8% and -0.9% respectively.
“With underlying trends such as mortgage affordability improving now, more buyers will re-enter the market providing competition for the cash purchasers, who currently represent 36% of all sales in Scotland, which will further boost confidence.”
House Price
Index
Monthly Change %
Annual Change %
£222,637
291.6
-0.3
0.0
Table 1. Average House Prices in Scotland for the period November 2022 – November 2023
(The prices are end-month smoothed over a 3 month period)
Month
Year
House Price
Index
Monthly Change %
Annual Change %
November
2022
£222,653
291.6
0.1
6.7
December
2022
£222,399
291.3
-0.1
6.5
January
2023
£221,162
289.7
-0.6
4.5
February
2023
£219,827
287.9
-0.6
2.9
March
2023
£219,531
287.5
-0.1
1.3
April
2023
£221,173
289.7
0.7
1.5
May
2023
£223,391
292.6
1.0
1.6
June
2023
£223,831
293.2
0.2
1.4
July
2023
£223,308
292.5
-0.2
0.5
August
2023
£223,079
292.2
-0.1
0.4
September
2023
£223,803
293.1
0.3
0.7
October
2023
£223,403
292.6
-0.2
0.5
November
2023
£222,637
291.6
-0.3
0.0
Note: The Walker Fraser Steele Acadata House Price Index (Scotland) provides the “average of all prices paid for houses”, including those made with cash.
Commentary: John Tindale, Acadata Senior Housing Analyst
November’s housing market
Scotland’s average house price in November 2023 has barely changed over the last year, being just £16 lower than twelve months earlier, and now stands at £222,637. Looking at Table 1 above, it can be seen that for eight of the last twelve months, the average house price has been in a range between £222,400 and £223,830, with the peak occurring in June 2023.
However, referring to Table 2 (on page 4 of this report), there is only one local authority area where the annual rate of change in house prices is zero, which is Glasgow City.
All 31 other areas in Scotland will therefore have been seeing some movement in their average house prices over the previous twelve months. Excluding annual price changes in the range of ±1% only removes a further 4 authorities, leaving 27 authorities that have annual price movements in excess of ±1%.
Indeed, an annual rate of ±3.6% would need to be reached before excluding half of the 32 areas in Scotland. It would therefore be wrong to conclude that all of Scotland’s local housing markets have been static over the last twelve months – rather, the more correct conclusion is that “it just so happens” that when you add all the movements in house prices in Scotland together, they sum to minus £16.
A similar picture emerges when looking at property types – over the last year, the average price of detached properties has increased by +1.2%, and flats by +0.5%, while semi-detached and terraced properties have fallen by -1.8% and -0.9% respectively.
Again, the sum of these changes will amount to (minus) £16 – but that is by chance. There are however underlying trends, such as the level of interest rates (discussed later) and the increase in household living costs which will affect all properties, but even then, these factors don’t necessarily apply to all.
Cash purchasers, for example – who currently represent 36% of all sales in Scotland – may be less influenced by high interest rates, compared to having to take out a loan to purchase a property.
Figure 1.Scotland’s average house price for the period from March 2020 to November 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 twelve months from November 2022 to November 2023, although values have risen by £39,640 from March 2020. This increase of 21.7% over the period compares to a figure of 19.7% 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 2.0%.
Local Authority Analysis
Table 2. Average House Prices in Scotland, by local authority area, comparing November 2022, October 2023 and November 2023
Table 2 shows average house prices, calculated on a seasonal- and mix-adjusted basis, by Local Authority Area, for November 2022 and October and November 2023, together with the corresponding percentage price changes over the last month and year.
The ranking figures are based on average house prices in November 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 November 2023.
Annual change
The average house price in Scotland in November 2023 has fallen by a minimal £16, or 0.0%, over the last twelve months, which is 0.5% lower than the rate seen in October, one month earlier. This is the lowest annual growth rate since May 2016, some seven and a half years earlier.
14 of the 32 local authorities in Scotland were reporting a positive movement in prices over the previous twelve months, compared with 17 in October. However, as with the previous month, 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 its average price of -£7,660), which on its own counterbalanced some 27% of the positive movement in values in the 14 areas with price gains.
In November, on the mainland, East Renfrewshire had the highest increase in its annual rate of price growth, at 12.0%, which enabled the authority to remain in top position in Table 2 for the third month running.
In fact, East Renfrewshire has occupied first place in Table 2 – indicating it has had the highest average property values – for six of the last twelve months, trumping the City of Edinburgh which has only been in first place for four months over this period. In East Renfrewshire, all property types have seen an increase in values over the last twelve months, but particularly semi-detached homes, with average prices rising from £300k in November 2022 to £350k twelve months later.
Staying on the mainland, Midlothian has the second-highest annual growth rate at 10.7%. Again, similar to East Renfrewshire, all property types have seen an increase in their average prices, but in Midlothian it is terraced properties that have had the most significant increase, up from an average £205k in November 2022 to £235k 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 was Dumfries and Galloway, at -5.4%. In Dumfries and Galloway, all property types saw prices fall over the year, with the largest fall on a weight-adjusted basis being terraced homes, down from an average £140k in November 2022 to £125k one year later.
Monthly change
In November 2023, Scotland’s average house price fell by some -£750, or -0.3%, which contrasts with the revised -£400, or -0.2%, change in prices seen in October. This is the seventh monthly fall of 2023: however, as discussed above, it would appear that prices have been gently oscillating over the last eight months, with the average price ranging between £221,000 and £224,000.
In November 2023, 12 of the 32 Local Authority areas in Scotland experienced rising prices in the month, the same number as in October. The area with the highest increase in its average price in the month was Inverclyde, up by 6.0%, although it still remains the authority with the lowest-priced housing in Scotland. The increase in the area’s price in the month was assisted by the sale of a modern 2-bedroom apartment, in Cloch Road, Gourock, overlooking the Clyde estuary, for £350k.
By way of contrast, the area on the mainland with the largest monthly fall in its average price was Fife, down by -3.6%. All property types in Fife saw a fall in their average prices over the month, with the most significant fall in prices being semi-detached homes, down from £207k in October 2023 to £192k in November.
For interest, the highest-priced home to have been sold in Scotland in November was a £2.9 million five-bedroom detached home in Dirleton, North Berwick, East Lothian, overlooking The Renaissance Golf Club course and the Firth of Forth. Golf is a recurrent theme in the sale of high value homes.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2019 to November 2023, based on Registers of Scotland (RoS) figures for the Date of Entry (except for November 2023, 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 – 2023
This brings us to the current year of 2023 (the black line) – the relatively high bank rate of 3.5% had an adverse effect on property transactions, with only 5,893 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 first eleven months of 2023, sales are down by 12.3% 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 – November 2023
CONFIDENCE is growing across the property market, a leading expert has said. Jonathan Rolande said new data released by RightMove, which showed soaring interest on Boxing Day, was matched by green-shoots of recovery in other areas of the sector.
The portal announced this week how, on Boxing Day, there were a record number of homes listed for sale. Rightmove says more than 10,000 new properties came to market, which is the biggest number of new sellers in one day since 2011.
In fact, visits to Rightmove nearly doubled between Christmas Day and Boxing Day. The level of demand from potential home-buyers, measured by the number of enquiries sent to estate agents about homes for sale, jumped too, and more than tripled (+273%) from Christmas Day to Boxing Day.
Mr Rolande, spokesman for the National Association of Property Buyers, said: “There will be many of us working in the property sector who will have raised a glass and toasted seeing the back of 2023.
“The hangover from Liz Truss’ botched mini-budget created huge problems across the market, and it was only through Autumn and Winter that we started to see the first signs of recovery. But, as we kick off the New Year, there are already some green-shoots on the horizon.
“I do sense a shift in the market and there are early signs, albeit fragile, of positivity. Banks have started fighting for mortgage business and are cutting rates to levels we’ve not seen in around seven months. Long may this continue. And, crucially, confidence is rising too among buy-to-let landlords.
“But confidence can only take you so far. There is still a chronic shortage of family homes across far too many parts of the UK. The crazy prices and mass viewings may have gone. But demand still outstrips the supply of decent homes, and remedying this will help to steady prices.
“Rental is still a disaster for too many would-be tenants. Stock is low. Rents are high. And this makes buying a home much more appealing. People I speak to, who know I’m in the industry, are no longer asking if it is the right time to buy. Instead they are asking for tips on finding somewhere to buy.”
Mr Rolande added: “It’s a small but subtle change but it underlines a shift from hesitation to growing confidence.
“As we enter a General Election year I’m increasingly of the view that the Party who best provide the answers are likely to be the ones who secure the most votes at the next General Election. A recovering housing market in 2024 is surely a vote-winner for all.”
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
Bank of Family support varies regionally and isn’t closely aligned to house price differences – recipients in the East of England are receiving most support (av. £32,100), while those in the West Midlands receive the least (av. £19,800)
Affordability issues are universal but most Bank of Family support goes to urban home purchases (216,500), compared to 100,500 rural homes
According to the survey, just 39% of Bank of Family recipients will benefit from professional advice from a mortgage broker or financial adviser before accepting help this year
Housing affordability is worsening across all UK regions, forcing many aspiring homeowners to depend on financial gifting from relatives – the Bank of Family – to step onto the ladder, according to new data from Legal & General and the Centre for Economics and Business Research (Cebr).
The report reveals that Bank of Family recipients may receive varying amounts of support depending on where they live. Surprisingly, levels of gifting don’t closely align to house price differences – according to the data, borrowers in the East of England are receiving the most support (av. £32,100), while those in the West Midlands receive the least (av. £19,800).
Huge gulf between the UK’s urban and rural markets
The data also indicates that the volume and individual size of Bank of Family gifting varies depending on whether the borrower lives in an urban or rural area. In 2023, the Bank of Family is expected to support the financing of 216,500 urban home purchases. Meanwhile, the number of rural homes bought with support from the Bank of Family will be less than half that total, at 100,500.
Homebuyers in towns and cities are not only more likely to lean on the Bank of Family to buy a home, but they often need to borrow more than those in rural areas. The Bank of Family is estimated to gift £5.7 billion towards urban home purchases in 2023, accounting for 70% of the value of Bank of Family support and more than two-thirds (67%) of the transactions it facilitates.
That equates to roughly £82bn worth of housing in 2023. The average gift or loan size for an urban home is also higher at £26,200, compared to £23,900 for a rural property.
Bank of Family propping up purchases up and down the country, but with huge regional variations
Although house prices appear to be softening, homebuyers are still facing worsening affordability across the UK property market. The Bank of England base rate increased from 0.1% in December 2021 to 5.25% in August 2023, significantly increasing mortgage costs, with the average repayment for a semi-detached house rising by 61% across all UK regions from 2022 to 2023.
These wider affordability currents are reflected in Legal & General’s report, which investigates the amount of property transactions in each UK region that received funding by a loan or gift from the Bank of Family. Buyers in London are by far and away the most likely to receive financial aid from family members, perhaps unsurprising with the average house price standing at almost double the UK average (£534,000 compared to £286,005 in April 2023).
In fact, the survey suggests the Bank of Family supported two-thirds (67%) of recent homebuyers in the capital, more than double the proportion of the second-placed region (the North West at 36%).
Legal & General also recorded the average size of Bank of Family financial gifts across all UK regions.
London, the South East, the East of England and the South West see the greatest contributions from the Bank of Family. However, there is not always a direct correlation between regional house prices and the average size of a Bank of Family gift. The East of England leads the way across all UK regions for the highest average Bank of Family gift or loan at £32,100 despite its lower house prices, trumping even London gifting at £30,000.
Find out more about the regional variation in Bank of Family lending with Legal & General’s interactive map, here.
Kevin Roberts, Managing Director, Legal & General Mortgage Services, commented: “Up and down the country, the Bank of Family is making significant financial sacrifices to help family members onto the housing ladder.
“Support is concentrated in urban and southern areas, where house prices are the highest, but is prevalent across the UK. While a brilliant lifeline for those able to draw on it, many people will not have access to such generosity and this widespread support is indicative of deep, underlying affordability issues affecting the UK.”
Significant gender split in borrowers seeking professional financial advice
Despite the Bank of Family being set to support a record number of home purchases in 2023, Legal & General’s survey also found that many recipients are not seeking professional advice.
Aspiring buyers who draw upon family support largely do not speak to an adviser before accepting family help, with just 39% of borrowers seeking guidance from a mortgage broker or professional adviser during their Bank of Family transaction. More than a quarter (28%) did not seek any advice at all.
Gender also plays a crucial role in borrowers’ decisions to seek professional advice. At 46%, women are far more likely to speak to a professional adviser than men (30%). In comparison, men (42%) were much more likely to depend on advice from friends than women (29%). Overall, 35% of all respondents asked friends and acquaintances who had similar experiences for advice.
Kevin Roberts, Managing Director, Legal & General Mortgage Services commented:“The Bank of Family has not only become a major lender – the ninth largest in the UK if it were a formal entity – but also a significant source of financial advice, with less than 40% of financial aid recipients seeking professional guidance before their transactions.
“The gender dynamics at play are also fascinating. At 46%, women are far more likely to speak to a professional adviser than men at 30%. In comparison, men are much more likely to depend on advice from friends than women, at 42% compared to just over a quarter (29%).
“In such a challenging economic climate, buyers must not overlook the insights that an adviser can bring to even the most complex of property transactions. Failing to do so could prove a very expensive mistake later down the line.”
Read the full report on the Legal & General website here. Find out more about how families can support each other when it comes to homeownership in the Legal & General Guide to Gifting here.
As we all know, living in the right postcode can be key to securing a place for your children at your dream school.
In an effort to ensure fair access, schools prioritise a number of factors for admissions but researchers have found that the British school system often relies more heavily on ‘distance from the school’, favouring those who live nearer.
But did you know that distance from a school can affect the local housing market?
Online Money Advisor wanted to investigate this phenomenon and set out to see where there are price premiums for buying a property within 0.5 miles of a school, and also to identify the schools in Scotland with the most expensive catchment areas.
Key findings
Glenrothes is the Scottish town with the highest premium for living close to a school, with the average property price within 0.5 miles of a school 14.28% higher than those further away.
Cambusbarron Primary School in Stirling is the Scottish school with the most expensive catchment area, with the average property within 0.5 miles of the school costing a staggering £432,663.
Across Scotland as a whole, homes close to schools increased in price by just 1.73%.
Scottish towns and cities with the highest premiums for living close to a school
We also wanted to find the towns and cities of Scotland where proximity to schools triggered the biggest increase in house prices. To do this, we calculated the average price difference between homes within 0.5 miles of a school and homes more than 0.5 miles away. Here are our results.
Rank
Town/City
Price Difference
1
Glenrothes
+14.28%
2
Edinburgh
+7.78%
3
Greenock
+7.64%
4
Glasgow
+5.88%
5
Aberdeen
+4.25%
6
Paisley
+4.06%
7
Inverness
+1.15%
-House prices are compared to the average price of properties within 0.5 miles with an above 1% price difference
The most expensive school catchment areas in Scotland
It’s no secret that the average house prices vary greatly across the UK. A variety of factors can influence the price of a property, but by exclusively looking at price premiums within school catchment areas we have identified the schools with the most expensive catchment areas in Scotland.
Rank
School
Town/City
Avg house price within 0.5mi
1
Cambusbarron Primary School
Stirling
£432,663
2
East Craigs Primary School
Edinburgh
£420,056
3
Craigmount High School
Edinburgh
£405,580
4
Uddingston Grammar School
Glasgow
£394,800
5
Dunnikier Primary School
Kirkcaldy
£353,295
6
Sunrise Christian School
Glasgow
£348,204
7
St Catherine’s RC Primary School
Edinburgh
£344,772
8
Bucksburn Academy
Aberdeen
£314,779
9
Wallacestone Primary School
Falkkirk
£309,122
10
Livingston Village Primary School
Livingston
£290,500
Scotland less affected by school catchment area premiums compared to other British regions
The study was conducted across England, Wales and Scotland to see where in the country property prices fluctuated the most as a result of proximity to a school. In Wales, a 6.09% price increase for properties near schools was measured overall.
This contrasts to London where demand to live near a school is lesser, with average house prices only being 0.45% higher when located within 0.5 miles of schools. Scotland’s house prices only experience a 1.73% premium when situated 0.5 miles of a school, so is not as affected by the phenomenon as other UK regions.
-Due to insufficient sample sizes, Northern Ireland has not been included in the study.
Methodology
We examined the prices of 57,708 homes in 232 towns and cities across Great Britain, comparing their price differences separately for 2-, 3-, and 4-bedroom homes.
The final ranking was based on the average price difference between homes within 0.5 miles of a school and homes more than 0.5 miles away
In addition, we determined which schools in our towns and cities have the most valuable properties nearby by ranking their average prices within 0.5 miles. In this section of the analysis, only two-bedroom, three-bedroom, and four-bedroom homes were considered. Due to this, some wealthy areas with large homes and mansions nearby schools were excluded.
Data from Zoopla was used and is accurate as of November 2022.
It is important to note that many factors can influence the price of a property. Our analysis is focused on the location of properties within a school catchment area to determine if there are price premiums for living nearby.
East Lothian is authority with highest average price
Transaction levels are second lowest of last ten years
Average Scottish house price £224,033, up 1.2% on April, up 1.9% annually
Table 1. Average House Prices in Scotland for the period May 2022 – May 2023
Scott Jack, Regional Development Director at Walker Fraser Steele, comments:“Our data shows that the Scottish housing market has seen another increase in average prices for the second month in succession.
“The average house price has risen in the month by some £2,600, or 1.2%, the largest increase since March 2022. The average house price in Scotland now stands at £224,033, which is £4,125, or 1.9%, higher than twelve months earlier.
“This strength of performance has to be seen in the context of broader market trends. Affordability has become the key issue in mortgage lending and is impacting would-be buyers. Inflation continues to loom over the UK and higher interest rates are an inevitability which makes the resilience of the Scottish market all the more remarkable. The squeeze on borrowers will continue and lenders have already sign-posted a contraction in the supply of mortgage loans over the coming months.
“We can see how affordability is impacting the market in the demand and subsequent price rises attributed to flats. Flats have increased in average price over the month by 3.8%, with semis and terraced properties both seeing a 1.5% increase. They now offer better value to buyers after months of subdued growth.”
Commentary: John Tindale, Acadata Senior Housing Analyst
The May housing market
Scotland’s housing market in May has shown a further increase in average prices, despite the economic headwinds of higher interest rates, increased consumer inflation and diminishing affordability. The average house price has risen in the month by some £2,600, or 1.2%, the largest increase since March 2022. Scotland’s average house price now stands at £224,033, which is £4,125, or 1.9%, higher than twelve months earlier. It also establishes a new record price for Scotland as a whole.
Figure 1. Scotland’s average house price for the period from March 2020 to May 2023
Figure 1 shows the movement in average house prices in Scotland from March 2020 – at the start of the pandemic, when the price was £183,017 – to May 2023. This amounted to an increase of £41,000, or 22.4%, over the period, and compares to an increase of 17.8% in the CPIH Index – so in real terms (after allowing for consumer price inflation) the average house price in Scotland has risen by 4.6%.
Scotland is not alone in seeing prices rise in May – the same pattern was also present in the North East of England, where prices rose by 0.9% in the month. The average house price in the North East is £202,491, which is the lowest of all the nine GOR regions in England and in Wales, with the Welsh average price now standing at £241,994. Scotland’s house price is the second lowest of all countries and regions in Great Britain.
Scotland has not been immune to the high rates of interest and the significant cost of living increases. As is shown on page 7, transaction levels in 2023 have fallen to their second lowest since 2013. The lowest level of the last ten years was observed in 2020 at the start of the Covid pandemic.
Unlike April 2023, when the increase in prices was concentrated in the high-value local authority areas in Scotland, the increase in values in May 2023 has been spread more evenly across the country. For example, of the £2,623 increase in the average price in the month at the national level, £1,343 originates from the top 16 local authority areas by value, and £1,280 from the lowest 16 areas by value – hardly a significant difference.
There has been a change in emphasis in May between property types, which is contra to recent experience. Flats have increased in average price over the month by 3.8%, with semis and terraced properties both seeing a 1.5% increase. On the other hand, detached properties have seen a -0.4% fall in average prices. This would explain the more even price increases across the local authority areas in Scotland in May, as flats are more universally spread throughout the country.
Local Authority Analysis
Table 2. Average House Prices in Scotland, by local authority area, comparing May 2022, April 2023 and May 2023
Table 2 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for May 2022, as well as for April and May 2023, 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 May 2023. Local Authority areas shaded in blue experienced record average house prices in May 2023.
Annual change
The average house price in Scotland in May 2023 has increased by £4,125 – or 1.9% – over the last twelve months. This annual rate of growth has increased by 0.3% from April’s 1.6%, and is the second consecutive upward movement in the annual rate of growth in 2023.
In May 2023, 20 of the 32 local authority areas in Scotland were seeing their average prices rise above the levels of twelve months earlier, one more than in April. Interestingly, only three of the top eleven areas ranked by value had price falls over the year, whereas six of the bottom eleven areas ranked by value saw prices fall. These statistics are less dramatic than in April 2023, when the numbers showed only two high-value areas and eight low-value areas with price falls. There is hence still a split between the behaviour of the high- and low-value areas, but it is less of a feature than previously experienced. For the record, the three high-value areas with price falls are East Dunbartonshire (-5.5%), Edinburgh (-1.6%) and Stirling (-0.6%).
The area with the highest annual increase in average house prices in May 2023 was – top of Table 2 – East Lothian, up by 10.9%. All property types in East Lothian, except flats, have seen an increase in their average prices over the last twelve months, with this month’s overall average being enhanced by the sale of a four-bedroom detached property in Gullane, for £1.275 million. The property overlooks the six-hole Children’s Golf Course – any child can play on the course at a minimal cost. Adults are also welcome to play, but they must be accompanied by a child.
On a weight-adjusted basis – which incorporates both the change in prices and the number of transactions involved – there were five local authority areas in May which accounted for 51% of the £4,125 increase in Scotland’s average house price over the year. The five areas, in descending order of influence, are: – East Lothian (13%); East Renfrewshire (11%); Perth and Kinross (10%); Fife (9%); and Renfrewshire (8%). Edinburgh accounted for 38% of the price falls in May, with all property types seeing values fall over the year.
Monthly change
In May 2023, Scotland’s average house price rose in the month by some £2,600, or 1.2%. The increase in the month is the highest since March 2022, some 14 months earlier. In May 2023, 24 of the 32 Local Authority areas in Scotland experienced rising prices in the month, four more than in April. Of the 24 local authorities with price increases in May, 11 are in the top half when ranked by price, and 13 in the lower half.
The largest increase in average prices in the month was in Inverclyde, up by 11.4%. However, Inverclyde has the second-lowest transaction count on the mainland, which tends to result in volatile movements in its average prices, especially when expressed in percentage terms. In second place is Dundee City, where prices have risen by 4.4% in the month. This increase was assisted by the sale of a new-build 3-bedroom detached home in Broughty Ferry for £1.2 million.
On a weight-adjusted basis, similar to that described above, the five local authorities which accounted for 47% of the increase in prices in the month were:- Glasgow (14%); Perth and Kinross (11%), East Lothian (10%) Inverclyde (6%) and Dundee City (6%). The Perth average prices are elevated this month by the sale of Glencarse House, which the agents describe as being one of Perthshire’s finest Country Houses. It has ten bedrooms and 18.6 acres of land. It sold for £2.35 million.
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 May 2023, there are 5 such authorities, down from 7 seen in April. 3 of these 5 areas are in the bottom 10 authorities when ranked by price, with 2 in the top 10 – including East Lothian which is currently top of Table 2. Also of interest is that Scotland’s overall average price is similarly at a record price – for the first time in the last six months.
Scotland transactions of £750k or higher
Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – May 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 43 such transactions recorded by RoS relating to May 2023. Currently, this is the fourth highest May total recorded to date, but this may rise to third place as RoS continues to process additional sales.
Looking at the number of high-value properties sold in the first four months of each year in Table 3, 2023 is ranked in fourth place – although the March totals in 2015 and 2021 are perhaps artificially high, having been boosted by tax-related events – these were the introduction of the LBTT in place of SDLT in April 2015 and the ending of the Covid related LBTT tax-holiday in April 2021.
However, there is a clear trend, in that the totals in each of the first five months of 2023 are lower than those in 2022, suggesting that some of the enthusiasm that existed in the 2022 housing market for the purchase of large country homes has dissipated, except perhaps in Perthshire (see above).
Edinburgh accounts for 137 of the 309 high-value sales (44%) that have been recorded to date by RoS in 2023, compared to 48% in 2022. There are two local authority areas having an equal second-highest number of sales in excess of £750k in 2023 – these were Glasgow City and East Lothian, but with just 18 such sales apiece.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2015 to May 2023, based on RoS (Registers of Scotland) figures for the Date of Entry (except for May 2023, which is based on RoS Application Dates).
The chart shows how, in general, transactions in May are higher than in April as sales climb to a summer peak, which can occur in June, July or August. In fact, in Figure 2, May is higher than April in eight of the nine years displayed – the one exception being 2022, as the country was slowly emerging from the pandemic.
2023 (the black line) has the second-lowest number of transactions for the first five months of each of the nine years shown in Figure 2, at 34,075 sales. The lowest year, at 25,324 sales, is 2020 (the teal line) – March 2020 having been the month in which the first Covid lockdown was announced. The decline in the current year’s level of transactions compared to previous years appears to have begun from having the second-highest number of sales in September 2022, falling to the lowest of the nine years by January 2023.
The start of the reduction in sales coincided with both the arrival of Mrs Truss as Prime Minister on 6 September 2022 and the seventh increase since December 2021 of the official bank rate, to 2.25%, on 22 September 2022. Liz Truss departed as Prime Minister on 25 October 2022. The bank rate was further increased on 3 November and 15 December 2022, ending the year at 3.5%.
The bank rate was raised again on 2 February 2023, 23 March 2023, 11 May 2023 and 22 June 2023, and now stands at 5.0%. It would thus appear that the increase in mortgage costs, especially since September 2022, has been having a negative effect on the number of housing sales taking place each month in Scotland’s housing market.
Figure 2. The number of sales per month recorded by RoS based on entry date from 2015 – 2023
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending May 2023. As reported above, 20 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year.
The highest increase on the mainland over the twelve months to May 2023 was in East Lothian, up by 10.9%, followed by East Renfrewshire at 10.7% and the Scottish Borders at 8.8%. At the other end of the scale, it was Clackmannanshire that had the largest fall in prices over the previous twelve months at -6.2%.
Comparisons with Scotland
Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-May 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–May 2023
Scotland’s Eight Cities
Figure 5. Average house prices for Scotland’s eight cities from March 2022–May 2023
Figure 6. Average house prices for Scotland’s eight cities May 2023
Solicitor and estate agents records year-on-year rise with market holding strong – and prices significantly ahead of pre-pandemic level
Average house prices in Edinburgh are more than £60,000 higher than before the Covid-19 pandemic, city-based solicitors and estate agents Lindsays has found.
And the firm says that prices across Edinburgh and throughout the Lothians show no signs of dropping – with values remaining stable and strong.
Lindsays has revealed that the average price of homes it sold through its Edinburgh office in the 2022-23 financial year was £322,250. That compared to £259,893 in 2019-2020. The firm’s average price in 2021/22 was £314,798.
After two years of unprecedented activity since the nation emerged from the first coronavirus lockdown in 2020, its estate agency team says volumes have returned to pre-pandemic levels.
Maurice Allan, Managing Director of Lindsays’ Residential Property department, said: “We’ve read lots of headlines about house prices dropping. We’re not seeing that. Edinburgh – as with other parts of Scotland – is bucking the trend that’s being reported elsewhere.
“We’re not in a market where prices are dropping. In fact, it’s a market that’s pretty solid. Family houses are continuing to enjoy strong attention and are going for real premiums.
“After a couple of quite remarkable years, we are seeing the market return to more normal levels of activity, last seen really in 2019.”
Property prices rose rapidly as the market intensified amid incredible demand following the lockdowns.
Activity began cooling in the face of political and financial instability last year, which saw interest rates – which had been at historic lows for a number of years – increase, coupled with the rising cost of living.
But this has not led to a drop in prices across Edinburgh and the Lothians.
Mr Allan added: “For the vast majority of properties, prices are holding up well. What we’re not seeing now, however, are the extremes that we experienced in a relatively small part of the market when competition was at its most intense.
“We are not finding that properties are selling below their home report valuation. And properties are selling. Finance is still available for people – and many people still have healthy deposits.
“The issue is not whether people are worried about being able to afford to move, it’s whether they can find the right property to suit their circumstances, whether that be needing a bigger home, downsizing or relocating.
“If they can find the right property to move to, they will put their current home on the market. It’s a supply and demand issue.
“Most people are trading in the same market. So, if someone finds the right home and they are ready, we are finding they just go for it.”
In Dundee, where Lindsays’ estate agency team also operates, the average prices of homes sold in the 2022-23 financial year was £205,790. That compared to £161,786 in 2019-2020. The firm’s average price in 2021/22 was £181,849.
The current Bank of England interest base rate is 4.25%. Some mortgage market analysts have stated that they expect mortgage rates to gradually decline throughout the year, even if interest rates go up.
According to solicitor estate agents’ collective ESPC, the average selling price of property across Edinburgh, the Lothians, Fife, and the Borders rose 1% to £270,284 during January to March this year.
Its members recorded the average property achieving 102.8% of Home Report valuation at sale.
February House Price Index from Walker Fraser Steele
January’s downturn in prices continues into February
Prices in 2023 experience the largest fall in fourteen years
East Renfrewshire is authority with highest average prices
Sales volumes are low in Jan & Feb – expect higher sales in March
Average Scottish House price now £220,702, down 0.9% on January, up 3% annually
Table 1. Average House Prices in Scotland for the period February 2022 – February 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:“Far from experiencing a storm, the Scottish housing market could be said to be navigating choppy waters.
“This is to be expected as January and February are typically slow months for house sales – in part because of the shorter days and extended holidays over the Christmas period. However, the seasonal lull in activity has been amplified by the rise in mortgage costs as a result of the ill-conceived Truss-Kwarteng mini budget.
“Amazingly, notwithstanding that onslaught, the current average house price still remains some £6,300, or 3.0%, above the average price of twelve months earlier. However, through a monthly lens, our index shows that in February 2023 prices continued their descent, falling by a further £2,000 in the month, on top of the £1,750 price decrease in January.
“If we take account of both the change in prices and the number of transactions involved – Edinburgh (17%); Aberdeenshire (9%); South Lanarkshire (9%); North Lanarkshire (7%); East Renfrewshire (6%); and Clackmannanshire (6%) in February accounted for 54% of the £6,300 increase in Scotland’s average house price over the year.
“Of note in Scotland is that many estate agents have noticed an increase in the number of rental properties coming to market. Landlords raised their concerns about the legislation in response to the cost-of-living crisis some time ago. This legislation has followed a sustained period of increased letting agent regulation, higher taxes for landlords and tight rent controls to protect tenants.
“As we emerge from February, we will watch transaction volumes carefully. In each of the last eight years, March transaction totals have always exceeded those of February. We should expect higher sales volumes in next month’s data.”
Commentary: John Tindale, Acadata Senior Housing Analyst
The February housing market
February 2023 continued the downward trend in average prices seen in January, with prices falling by a further £2,000 in the month, on top of the £1,750 price decrease in January. Prices in 2023 to the end of February have therefore dropped by £3,750. Ignoring the price movements associated with the introduction of the LBTT tax in April 2015 and the termination of the LBTT tax-holiday in April 2021, these price reductions represent the largest falls over two months since February/March 2009, some fourteen years ago.
During February 2023, it was the price of flats that again fell the most, down by -1.8% in the month.
So why the price falls? As discussed last month, January and February are typically the weakest months of the year in Scotland’s housing market in terms of transaction levels, which is in part to do with Christmas, when many estate agents remain closed over the holiday period.
When sales levels are low, minor trends – which might otherwise have been obscured by the larger number of sales in the other months of the year – can stand out. For example, estate agents have been reporting that the number of sales of properties which have previously been in the rental market are becoming more noticeable, with the government rent cap and future regulation changes deterring investors in this sector.
Even a small exodus of private investors in buy-to-let properties will have an impact on prices in the winter months. In Edinburgh, for example, the price of an average flat fell from £286k in December 2022 to £275k in February 2023, while in Glasgow average flat prices fell from £180k to £169k over the same period – with these two cities accounting for 38% of Scotland’s flat sales in February.
Despite reporting the largest monthly fall in prices of the last fourteen years, the current average house price still remains some £6,300, or 3.0%, above the average price of twelve months earlier.
Indeed, as can be seen from Figure 1 below, taking a view of price movements in Scotland over the last five years, the dip in prices in January and February 2023 is barely perceptible. The average house price in February 2018 was £178,175 compared to £220,702 in February 2023 – a £42,500, or 24% rise over the period – about which the adage that past performance is no guarantee of future performance is pertinent.
Figure 1. The average house price in Scotland over the five year period February 2018 to February 2023
Local Authority Analysis
Table 2. Average House Prices in Scotland, by local authority area, comparing February 2022, January 2023 and February 202
Table 2 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for February 2022, as well as for January and February 2023, 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 February 2023. Local Authority areas shaded in blue experienced record average house prices in February 2023.
Annual change
The average house price in Scotland in February 2023 has increased by some £6,300 – or 3.0% – over the last twelve months. This annual rate of growth has decreased by -1.6% from January’s 4.6%, which is a slightly smaller fall than the -1.9% reduction seen in January.
However, in February 2023, 23 of the 32 local authority areas in Scotland were still seeing their average prices rise above the levels of twelve months earlier, three fewer than in January. The nine areas where values fell over the year were, in descending order (with newcomers this month marked by an asterisk):- Inverclyde* (-8.7%), Orkney Islands* (-3.0%); Fife (-2.9%), Aberdeen City (-2.1%), Na hEileanan Siar (-2.0%), Glasgow City* (-1.2%), Angus* (-1.2%), Scottish Borders (-0.4%) and Dundee City (-0.2%).
The area with the highest annual increase in average house prices in both January and February 2023 was Clackmannanshire, up by 25.0% and 29.3% respectively over the two months. However, there were only 27 transactions in Clackmannanshire in February 2023, with a small number of transactions frequently being associated with volatile movements in average prices.
On a weight-adjusted basis – which incorporates both the change in prices and the number of transactions involved – there were six local authority areas in February which accounted for 54% of the £6,300 increase in Scotland’s average house price over the year. The six areas in descending order of influence are: – Edinburgh (17%); Aberdeenshire (9%); South Lanarkshire (9%); North Lanarkshire (7%); East Renfrewshire (6%); and Clackmannanshire (6%).
Monthly change
In February 2023, Scotland’s average house price fell in the month by some -£2,000, or -0.9%. This is the largest fall in a single month since March 2009, some fourteen years ago, ignoring the rather artificial falls around the months relating to the introduction of the LBTT in April 2015, as well as the ending of the LBTT tax-holidays in April 2021.
In February 2023, Scotland’s average house price fell in the month by some -£2,000, or -0.9%. This is the largest fall in a single month since March 2009, some fourteen years ago, ignoring the rather artificial falls around the months relating to the introduction of the LBTT in April 2015, as well as the ending of the LBTT tax-holidays in April 2021.
On a weight-adjusted basis, there were four local authority areas in February which accounted for 51% of the -£2,000 decrease in Scotland’s average house price in the month. The four areas in descending order of influence are: – Glasgow (-18%); Edinburgh (-16%); Fife (-9%); and East Lothian (-8%). It is not surprising to find Glasgow and Edinburgh in this listing, given the fall in flat prices, as they are the two authorities with the highest percentage of flats being sold each month, at 67% and 63% of their respective transaction totals.
On a similar theme, Fife has the highest proportion of terraced sales of all the 32 local authorities in Scotland, at 27% – terraced properties also being popular among buy-to-let investors, who may have decided it is time to sell.
The highest increase in average prices in the month was in East Renfrewshire, where – with two detached properties selling for £1 million plus in Newton Mearns, one being a new-build on the Southfield Grange Development – the average price of detached properties in the area rose by £22k in the month.
Overall, in February, the average price in East Renfrewshire increased by 7.7%, causing Edinburgh with its downward movement in prices, to fall into second place in terms of having the highest-valued average house price in Scotland.
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 February, there are 5 such authorities, up by one from 4 in January.
Scotland transactions of £750k or higher
Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – February 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 37 such transactions recorded by RoS relating to February 2023. Currently, this is the fourth-highest February total recorded to date, but there is likely to be an increase to this figure next month, as RoS process additional sales.
According to the RoS data, the highest priced property sold in Scotland in February 2023 was a £1.6 million terraced property in Edinburgh. This contrasts with three properties sold in January at £3 million plus. Although the number of such sales is small, especially in the winter months, it is perhaps an early indication of a slight slowing in sales at the top-end of the market.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2015 to January 2023, based on RoS (Registers of Scotland) figures for the Date of Entry.
The chart shows how transactions tend to dip in February from the January totals, which in turn are lower than the totals for the year’s preceding December. In six of the eight years displayed, the February sales total is the lowest of the year. The two occasions when this was not the case was in February 2020 and February 2021.
In February 2020 the Covid pandemic had yet to be identified, with the first lockdown beginning on 23rd March 2020, Phase 1 being introduced on 29th March 2020 and Phase 2 introduced on 19th June 2020. This resulted in an almost total lack of sales in April 2020 – a position clearly visible on the graph.
In 2021 the end of the LBTT tax-holiday was planned, and indeed, did end on 31st March. Consequently, sales of properties were higher than average in the final two months of the scheme – the brown line showing a peak in sales in March 2021. Sales did however slump in April 2021, as the tax-holiday came to an end. April was therefore the month with the lowest level of sales in 2021.
A close study of the eight years displayed in Figure 2 also reveals that each December is followed by a reduction in transactions in the following January, without exception.
Figure 2. The number of sales per month recorded by RoS based on entry date from 2015 – 2023
What we can also learn from Figure 2 is that one of the three months of June, July and August have seen the highest sales of the year in 4 of the 8 years displayed. Finally, in each of the eight years, March transaction totals have always exceeded those of February. One can therefore look forward to higher sales volumes with next month’s data
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending February 2023. As reported above, 23 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year, the nine exceptions being :- Inverclyde, Orkney Islands, Fife, Aberdeen City, Na h-Eileanan Siar, Glasgow City, Angus, Scottish Borders and Dundee City.
The highest increase on the mainland over the twelve months to February 2023 was in Clackmannanshire at 29.3%, although this was based on a relatively small number of sales. In second place on the mainland was Moray at 14.3%. 4 of the 32 local authority areas had price growth of 10.0% or higher – one fewer than in January 2023.
Comparisons with Scotland
Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-February 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–February 2023
Scotland’s Eight Cities
Figure 5. Average house prices for Scotland’s eight cities from December 2021–February 2023
Figure 6. Average house prices for Scotland’s eight cities February 2023
