Tag: house prices

January house prices fall by largest amount in ten years: Walker Fraser Steele House Price Index

  • Price of flats drops by 2.0% in January
  • Top 11 authorities by value all see price reduction
  • Fife sees largest fall in prices on a weight-adjusted basis
  • Average Scottish house price now £222,668
  • Monthly change down 0.9%, annually 4.6% up

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

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “The headline figures this month mark the first real change in direction for house price growth in Scotland since 2012.

“We are likely seeing a conflation of factors that have resulted in this fall. On a purely seasonal note, January and February are traditionally slower months for housing transactions in Scotland – partly as a result of estate agency Christmas closures and reduced daylight hours for viewings. 

“However, a fall in the average house price was perhaps inevitable given the sudden rise in the cost of mortgage finance and the economic turmoil brought about by the Truss-Kwarteng mini-budget.

“But a fall in the average has not meant a fall across all property types. If we look beyond the headline average house price fall of 0.9%, we can see how the varied types of property stock fared differently over the month. During January it was the price of flats that fell the most, by -2.0%, followed by terraces, down by -1.6%, and semi-detached properties down by -0.6%.

Meanwhile, the average price of detached homes remained steady during the month, with 0.0% price change. This is less surprising in so far as the more expensive detached properties tend to attract wealthier and more resilient buyers who are less impacted by the rising cost of mortgage finance.

“So, the average house price fall requires some perspective. We need to remember that in spite of the fall, the current average house price still remains some £9,700, or 4.6%, above the average price of twelve months earlier.”

Commentary: John Tindale, Acadata Senior Housing Analyst

The January housing market

In January 2023, average house prices in Scotland fell by -£1,921, or -0.9%. 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, this is the largest fall in a single month since December 2012. During January it was the price of flats that fell the most, by -2.0%, followed by terraces, down by -1.6%, and semi-detached properties down by -0.6%. Meanwhile, the average price of detached homes remained steady during the month, with 0.0% price change.

So why the price fall? January and February are typically the weakest months of the year in Scotland’s housing market. Transaction levels are at their lowest in these two months, which is in part to do with Christmas, when many estate agents remain closed over the holiday period, and in part due to the lack of daylight hours and inclement weather associated with these two winter months. 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 is 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 £274k in January 2023, while in Glasgow average flat prices fell from £180k to £175k over the same period – with these two cities accounting for 42% of Scotland’s flat sales in January.

Despite reporting the largest monthly fall in prices of the last ten years, the current average house price still remains some £9,700, or 4.6%, 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 2023 is barely perceptible. The average house price in January 2018 was £174,637 compared to £222,668 in January 2023 – a £48,000, or 27.5% rise over the period. This increase in price equates to a compound interest rate of 5.0% over the five years – which is a reasonable rate of return, given that the official bank rate over this period was mostly lower than 0.75%. 

Figure 1. The average house price in Scotland over the five-year period January 2018 to January 2023

Local Authority Analysis

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

Table 2 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for January 2022, as well as for December 2022 and January 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 January 2023. Local Authority areas shaded in blue experienced record average house prices in January 2023.

Annual change

The average house price in Scotland in January 2023 has increased by some £9,700 – or 4.6% – over the last twelve months. This annual rate of growth has decreased by -2.0% from December’s revised 6.6%, which is the largest reduction in the annual growth rate of the last fourteen months.   

However, in January 2023, 26 of the 32 local authority areas in Scotland were still seeing their average prices rise above the levels of twelve months earlier, only three fewer than in December. The six areas where values fell over the year were, in descending order, Na h-Eileanan Siar (-5.8%), Aberdeen City
(-4.5%), Stirling (-3.8%), Scottish Borders (-2.8%); Dundee City (-0.8%) and Fife (-0.5%).

The area with the highest annual increase in average house prices in January 2023 was Clackmannanshire, up by 25.0%. However, there were only 33 transactions in Clackmannanshire in January 2023, which falls below the desired sample size to obtain a reasonably accurate average price. Consequently, we suggest that the result for Clackmannanshire is treated with a degree of caution this month. The same ruling also applies to the three Island groups of Na h-Eileanan Siar, the Shetland Islands and the Orkney Islands, where there were only 6, 14 and 16 sales in the month respectively.

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 January which accounted for 51% of the £9,700 increase in Scotland’s average house price over the year. The six areas in descending order of influence are: – Edinburgh (23%); North Lanarkshire (7%); Glasgow (6%); Aberdeenshire (5%); East Renfrewshire (5%); and South Lanarkshire (5%).

Monthly change

In January 2023, Scotland’s average house price fell in the month by some -£1,900, or -0.9%. This is the largest fall in a single month since December 2012, some ten 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 January 2023, 23 of the 32 Local Authority areas in Scotland experienced falling prices in the month, which is eight more than in December2022. Of the 23 local authorities with price falls, 11 out of the top 11 areas when ranked by price all had price falls. Overall, it was the price of flats that saw the largest falls in the month, down by -2.0%, followed by terraces, down by -1.6%, with semi-detached properties down by -0.6%, while the average price of detached properties remained constant, with 0.0% change.

On a weight-adjusted basis, there were four local authority areas in January which accounted for 53% of the -£1,900 decrease in Scotland’s average house price in the month. The four areas in descending order of influence are: – Fife (-16%); Glasgow (-15%); Edinburgh (-15%) and Falkirk (-7%). 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.  

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 January, there are 4 such authorities, down from 6 in December.

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 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 52 such transactions recorded by RoS relating to January 2023. Currently, this is the third-highest January total recorded to date, but there is likely to be an increase to this figure next month, as RoS process additional sales – we will have to wait and see whether the increase is sufficient to make the total the second highest of the last nine years. There does however appear to be a slight decrease from the number of high-value sales occurring in 2022 – but it is too early to be confident that the total of such sales will be higher or lower in 2023 than in the previous year.

There were three properties sold in Scotland in January having a value of £3 million or higher: an architect-designed 4 bedroom 2012 property in Maidens, Ayrshire, with views over the Firth of Clyde, which sold for £3.1 million; a “Baronial Style” 6 bedroom detached home in Colinton, Edinburgh, 3½ miles south-west of the city centre, which sold for £3.075 million; and a detached home, about a mile from the Muirfield golf course in Gullane, North Berwick, which sold for £3.0 million. It is good to know that, alongside the potential gloom in January’s housing market, high-value homes in splendid locations are continuing to attract willing buyers.     

Transactions analysis

Figure 2 below shows the monthly transaction count for purchases during the period from January 2007 to January 2023, based on RoS (Registers of Scotland) figures for the Date of Entry (January 2023 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 of 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 – 2023

In Figure 2, three peaks can be seen after March 2020: in October 2020 (pent-up demand from the low transaction levels earlier in 2020) and March and June 2021 (LBTT and SDLT tax-holidays encouraging sales in both Scotland and England). The dip in housing activity in January and February of each year is also clearly visible. For the record, the average number of transactions in January and February over the ten-year period from 2013 to 2022 was 6,476 and 5,717 respectively, compared to an average 8,633 sales for the remaining ten months. 

In 2022, transaction levels have averaged 8,358 sales per month, which is down 2.4% on the 8,561 average sales that took place in 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 January 2023. As reported above, 26 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year, the six exceptions being Na h-Eileanan Siar, Aberdeen City, Stirling, the Scottish Borders, Dundee City and Fife. The highest increase on the mainland over the twelve months to January 2023 was in Clackmannanshire at 25.0%, although this was based on a relatively small number of sales. In second place on the mainland was Moray at 11.4%. 5 of the 32 local authority areas had price growth of 10.0% or higher – one fewer than in December 2022.

Comparisons with Scotland

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

Scotland’s Eight Cities

Figure 5. Average house prices for Scotland’s eight cities from November 2021–January 2023

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

Walker-Fraser-Steele-Acadata-House-Price-Index-Scotland-January-2023Download

Scotland’s house price growth continued in December

  • East Renfrewshire is the mainland authority with the highest growth at 17.7%
  • 2022 makes history with the largest number of high-value homes sold
  • Edinburgh one of six areas with values increased by 10% or more

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “If we step back for a moment and look at 2022 overall, it has been a record year for housing transactions in Scotland – all the more significant if we consider the performance of house prices over the last couple of years which have seemingly inexorably climbed.

“When we consider the rise in prices since the start of lockdowns back in March 2020, the average house price over that period has risen £41,700 (or 22.7 per cent). If we look at consumer prices measured by the CPIH over the same period, house prices have comfortably outperformed price growth elsewhere.

“Our data looks at the entire market which includes the significant volume of cash purchases north of the border and supports the view expressed in the RICS Residential Market Survey for December and January which indicated that prices are generally remaining resilient in Scotland. A frequent observation is that there remains a lack of suitable properties coming on to the market, which creates competition for those that are available, which helps in turn support current price levels.

“If we focus specifically on December, we can see the impact of the rising cost of borrowing. The average house price in Scotland continued to rise during December, although the increase was a modest £63. Average prices have now reached £225,520, which is some £14,800 – or 7.0% – higher than a year earlier. This sets another new record average price for Scotland, the tenth to occur in 2022.”

Table 1. Average House Prices in Scotland for the period December 2021 – December 2022 (The prices are end-month smoothed over a 3 month period) (Link to source Excel)

Commentary: John Tindale, Acadia Senior Housing Analyst:

The December housing market

Average house prices in Scotland continued to rise during December, although the increase was a very modest £63. Average prices have now reached £225,520, which is some £14,800 – or 7.0% – higher than a year earlier. This sets another new record average price for Scotland, the tenth to occur 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 £41,700 or 22.7% to the end of December 2022. This compares favourably with the increase in consumer prices of 15.4%, measured by CPIH, over the same period. Property prices have thus risen in real terms over the last nearly three years.

Looking at the first six months of the monthly rates of change in house prices in Table 1 on page 3, the total amounts to 5.3%, which contrasts with the 1.5% increase in monthly rates during the second half of 2022.

This is a clear demonstration of the cooling in the housing market that has taken place over the last six months. However, what we can also see is that, with the exception of August 2022, the movement in prices has remained positive, which indicates that demand for properties still exists – even if it has softened from the levels seen earlier in the year.

As we show on page 7, sales of high value properties have continued throughout 2022, at a pace which exceeds that of 2021 – which year had itself set new record levels, almost 90% higher than the total number of high-value properties sold in 2019.

The RICS Residential Market Survey for December and January both indicated that prices are generally remaining resilient in Scotland, which contrasts with negative movements to the south in England. A frequent comment among surveyors in Scotland is that there is a lack of properties coming on to the market, which creates competition for those that are available, generally maintaining existing price levels. We wait with considerable interest to see what 2023 has in store.

Annual change

The average house price in Scotland in December 2022 has increased by some £14,800 – or 7.0% – over the last twelve months. This annual rate of growth has marginally decreased from November’s revised 7.1%, but only by the smallest of margins. In fact, prices in December increased by just £63 in the month, but an increase is an increase, and somewhat remarkably this rise established yet another record average house price – £225,520 – for the tenth month this calendar year.

In December 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 November. The three areas where values fell over the year were, in descending order, Aberdeen City (-5.4%), Scottish Borders (-3.0%) and Stirling (-0.7%).

Aberdeen City has now fallen by nine places over the year to 24th in terms of its ranking of average prices compared to the other 31 local authorities in Scotland. This month in Aberdeen City, flats have experienced the largest fall in value, from an average £120k in December 2021 to £105k one year later.

The area with the highest annual increase in average house prices in December 2022 was the Shetland Islands, where average values have increased by 19.5% over the year. In the Shetland Islands, detached property values have seen the highest rise over the year, from £190k in December 2021 to £240k twelve months later, but this is based on a relatively small number of transactions.

On the mainland, the highest annual increase was in East Renfrewshire, up by 17.7%. This increase has been assisted by the sale of a £2.3 million detached property in Giffnock, some nine miles to the south of Glasgow. The property is the most expensive home to have been sold in East Renfrewshire in the last five years.

On a weight-adjusted basis, which incorporates both the change in prices and the number of transactions involved, there are five local authority areas in December which accounted for 51% of the £14,800 increase in Scotland’s average house price over the year. The five areas in descending order of influence are: – Edinburgh (25%); Glasgow (11%); East Renfrewshire (5%); North Lanarkshire (5%); and South Lanarkshire (5%).

Monthly change

In December 2022, Scotland’s average house price rose in the month by just £63, or 0.0% This follows November’s rise in prices of some £1,100, but it does at least remain positive.

In December 2022, 17 of the 32 Local Authority areas in Scotland experienced rising prices in the month, which is the same number as in November. Of the 17 local authorities with price increases, 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.

The area with the largest increase in average prices on the mainland in December was Moray, up by 4.9%. This month, the increase in the average price in Moray was helped by the sale of a six-bedroom detached home, set in eight acres of land, located some 1.5 miles to the west of Elgin. It sold for £1.1 million which is the second most expensive property in Moray in 2022. It had previously been sold in June 2010 for £800k, which works out at an annual compound gain of 2.6%, over the period.

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 December, there are 6 such authorities, down from the 8 in November. Scotland itself has also set a new record average house price of £225,520 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 – December 2022 (Link to source Excel)

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 114 such transactions recorded by Ros during the month, with 70 relating to December 2022, 34 to November 2022 and a further 10 from earlier months, increasing the number registered to date in 2022 to 1,198.

This total already exceeds that of 2021, with a further 30 or so properties likely to be added to the total next month. Thus 2022 has proven to be the year with the largest number of high value sales in Scotland’s housing history.

Indeed, on the relatively safe assumption that a further 10 sales will be added to the December 2022 total, we can say that such sales in 2022 exceeded those in each month of 2021, except for March and June.

It may be recalled that March 2021 was the last month in which the LBTT tax-holiday applied in Scotland – which explains the higher number of sales that occurred in that month. Similarly, June 2021 was the last month of the SDLT tax-holiday in England – which wouldn’t have saved money for those buying a property in Scotland, but may have acted as an incentive for those moving to Scotland from England, so as to maximise the value of the home being sold.

Table 4 (next) provides a listing of the local authority areas ranked by the number of sales in excess of or equal to £750,000 for the years from 2018 – 2022.

Transactions analysis

Figure 2 below shows the monthly transaction count for purchases during the period from January 2007 to December 2022, based on Ros (Registers of Scotland) figures for the Date of Entry (December 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 of 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 (Link to source Excel)

In Figure 2, three peaks can be seen after March 2020: in October 2020 (pent-up demand from the low transaction levels earlier in 2020) and March and June 2021 (LBTT and SDLT tax-holidays encouraging sales in both Scotland and England). In the first eleven months of 2022, transaction levels have averaged 8,563 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 December 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 Stirling. The highest increase on the mainland over the twelve months to December 2022 was in East Renfrewshire at 17.7%. 6 of the 32 local authority areas had price growth of 10.0% or higher – four fewer than in November 2022.

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

Competitive pressures and short supply continue to push Scotland’s average house price up

October House Price Index from Walker Fraser Steele

  • Prices rising in 29 Local Authorities over the year
  • East Ayrshire has largest annual growth on the mainland at 14.9%
  • Record prices in 10 high-value areas
  • 2022 likely to see greatest number of sales in excess of £750k

Table 1. Average House Prices in Scotland for the period October 2021 – October 202

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “The housing market across the UK has endured a tumultuous time over the past couple of months and yet – notwithstanding the stresses it has been under – our data reveals that average house prices in Scotland in October rose by some £700, or by 0.3%.

“We think two things have influenced this figure. Firstly, the lack of supply of the right kind of properties, those with more space for working and living from home, persists which supports the average price in general. This continued demand has to a degree provided some protection from the more challenging economic turmoil in September.

“But there is another factor to consider. Current buyers who secured finance before the financial markets’ turbulence in September stayed the course to see through their purchases.

“Our sales data from the property purchases recorded by the Office for National Statistics uses the date that a purchaser takes ownership – so decisions to buy made in August and early September, for example, may be coming through in October.

“We can be confident that many buyers were keen to continue with a purchase agreed before September’s financial chaos, as they almost certainly had been offered favourable mortgage rates by lenders.

“These two elements in concert have supported demand for properties with the average house price in Scotland rising to £224,593, establishing a new record level. Over the twelve months to the end of October, prices have risen by some £14,100, or 6.7%.”

Commentary: John Tindale, Acadata Senior Housing Analyst

The October housing market

September and October 2022 proved to be a somewhat tumultuous period in UK politics. There was the arrival of Liz Truss as Prime Minister on 6th September 2022, followed shortly thereafter by the death of Her Majesty Queen Elizabeth on 8th September at Balmoral.

Politics were then put on hold for the period of national mourning, culminating in the Queen’s funeral on 19th September at Westminster and Windsor Castle. This was then followed by the mini-budget, put together by Liz Truss and Kwasi Kwarteng, and delivered on 23rd September – this resulted in Sterling crashing to a new low, with inflation rates rising to levels not seen for forty years.

Kwasi Kwarteng was sacked as chancellor on 6th October, to be replaced by Jeremy Hunt – with Liz Truss departing her post as Prime Minister on 20th October, to be replaced by Rishi Sunak.

It is therefore somewhat surprising to discover that, amid all these unsettling events, average house prices in Scotland in October rose by some £700, or by 0.3%. There are perhaps some clarifying factors that might explain this increase in prices.

Firstly, the matter of timing. The purchase of a property will typically take a few months to complete, from the initial decision to buy, to the official date of entry into one’s chosen home. (When recording property purchases the ONS and Acadata use the “date of entry” as the point of sale.)

It is therefore quite possible that “October sales” are reflecting August market sentiment. Indeed, there are instances where buyers have been keen to continue with a purchase agreed before September, as the favourable mortgage rates offered by the lenders were fixed for a period of five years, providing that the property in question remained the subject of the loan.

In addition, some of the factors that resulted in the decision to purchase a home in the first instance continued, even in the changed environment – such as the desire for space, and the problem of few suitable properties being placed on the market. Demand for properties therefore remained significant, with the average house price in Scotland rising to £224,593, establishing a new record level. Over the twelve months to the end of October, prices have risen by some £14,100, or 6.7%.

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

The RICS Residential Market Survey for October suggests that the home sales market continued to lose momentum amid deteriorating macro conditions, with indicators on new instructions and agreed sales remaining negative.

The report did however advise that respondents based in Scotland continued to report a reasonably firm upward trend in house prices continuing, even if the pace of growth was 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.

Sales of high-value properties in the first ten months of 2022 are at a record high, with few indications that the pace of such sales is diminishing. The three highest-value local authorities in Scotland, of Edinburgh, East Lothian and East Renfrewshire, each set a new record average house price in October.

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

Annual house price growth increases to 10.5% in Scotland  

✓ Increase in the rate reflects the low annual comparison point in June 2021  

✓ 19 Local Authorities have price growth in excess of 10.0%  

✓ Transactions are lower than in June 2021 – but that was a bumper month  

✓ Argyll and Bute has highest growth rate at 25.5%  

• The Walker Fraser Steele Acadata House Price Index (Scotland). Please refer to the Notes at  the end for information on content and methodology. 

• Walker Fraser Steele is the trading name of e.surv Chartered Surveyors in Scotland.

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “June is the mid-point in the calendar year, the summer solstice marking when the sun is at its most  northerly point – but will this June also herald a change in temperature for the housing market in  Scotland? Possibly. 

“Average house prices continued to rise in June, but only by 0.4% (£950) to £221,900 accompanied by  a slight downturn in the total number of transactions – compared admittedly to an unusually high  number in June last year.

“Added to this, four of the bottom five local authorities by value saw prices  fall in June, suggesting that the lower end of the market is running out of steam. However, looking in  the round, whilst the number of transactions may be cooling, continued lack of supply and strong  demand, particularly for higher value, spacious properties, is fuelling individual prices.

“There were 70  sales in excess of £750,000 in June alone, the highest annual increase in average house prices  recorded in Argyle & Bute, up 25.5% over the year, with June seeing three high value houses go for  well over the asking price. In fact, for the year to date there have been 453 sales in excess of £750,000 in Scotland, over half (228) in Edinburgh, driving the underlying rise in average house prices which  have increased by 10.5% (£21,000) on an annual basis. 

“As we move into the second half of the year it will be interesting to see the impact of reduced  competition at the lower end of the market on properties higher up the value chain. However, to date,  the sun continues to shine almost unabated as restricted supply remains the dominant factor for  house prices across Scotland.”

Commentary: John Tindale, Acadata Senior Housing Analyst  

The June housing market  

The average price paid for a house in Scotland in June 2022 is £221,900, establishing yet another  record price for the country – the twelfth occasion that this has happened in the last twelve months.  

This price is some £21,000 higher than that seen in June 2021, indicating that prices have risen by  10.5% on an annual basis. This annual growth rate is the highest recorded to date in 2022, but it has  been elevated by a near £3,000 fall in prices that occurred twelve months earlier in June 2021,  meaning that the base point for measuring the annual growth rate started from a particularly low level.

In fact, the average house price only rose by some £950, or +0.4%, in June 2022 – the lowest  monthly increase of this calendar year.  

Figure 1. The average house price in Scotland over the period June 2020 to June 2022 (Link to source Excel)

As discussed, there would appear to be a minor slowdown in the number of transactions  that took place in June 2022, compared to the previous year – although June 2021 had set a new  record level for the month, and was also the fourth-highest monthly total of the previous ten years, so  the bar to clear had been set extremely high. 

On page 5 we show that the number of high-value transactions are similarly seeing a minor  slowdown, but again the June 2021 total was always going to be hard to exceed. However, the June  2022 total is the second month of this calendar year in which the total number of high-value sales is  not the greatest for the month of the eight years shown. 

Nevertheless, the desire to live in properties with plenty of space, generally meaning the purchase of  high-value detached properties, continues. Frequently, the achieved selling price then exceeds that of  the guide price, likely indicating that there has been competition for properties with the requisite  characteristics.

New instructions to sell remain relatively thin on the ground, so maintaining the tight  supply conditions, and hence supporting the monthly increase in house prices. The latest RICS UK  Residential Survey does not anticipate that this pattern will change “for the time being”.

Annual change  

The average house price in Scotland increased by some £21,000 – or 10.5% – over the last twelve  months, to the end of June. This is a near £4,000 increase over the £17,000 growth in prices seen in  the twelve months to the end of May 2022 – but prices in June 2021 fell by £3,000 from May 2021, so  the base starting point for measuring annual changes in value was already at a relatively low level,  making it more likely that prices would show an increase twelve months later.  

In June 2022, 30 of the 32 local authority areas in Scotland saw their average prices rise over the levels  seen twelve months earlier – the two exceptions being Na h-Eileanan Siar and Inverclyde, although the  average property price in Na h-Eileanan Siar only fell by £5 over the year. These two areas are  currently bottom of Table 3, meaning that they have the two lowest average property values of the 32  local authority areas in Scotland. As we suggested last month, this may indicate that the competition  between buyers for homes is not so intense at the lower end of the price spectrum. 

The area with the highest annual increase in average house prices in June 2022 was Argyll and Bute,  where values have risen by 25.5% over the year. This is the third 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 again occurred in June, with  a five-bedroom detached home on the Isle of Bute having an asking price of £700,000 but selling for  £830,000. Three examples, in the same area, show the way in which competition for homes in  attractive locations can result in a noticeable increase in average house prices. 

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 June that account for 42% of the £21,000 increase in  Scotland’s average house price over the year. The five areas in descending order of influence are: – Edinburgh (13%), Glasgow (11%); South Lanarkshire (7%); Fife (6%); and Perth and Kinross (5%).  

Monthly change  

In June 2022, Scotland’s average house price in the month rose by some £950, or 0.4%, continuing the  pattern of minor upward oscillations in property values on a monthly basis. The average price in Scotland now stands at £221,900, which sets a record level for the nation for the twelfth month in  succession.  

In June 2022, 18 of the 32 Local Authority areas in Scotland experienced rising prices in the month,  three fewer than in May. The largest increase in average prices in June, of 7.4%, was in Perth and  Kinross, where the average price of detached homes increased from £350k in May to £380k in June.  The average price for homes was elevated in the month by the sale of a four-bedroom local architect  designed detached property near to the Bridge of Cully, which sold for its asking price of £1.3 million.  

At the other end of the scale, the lowest increase in average prices in June, of -7.4%, was in Inverclyde.  In Inverclyde the price of detached homes fell from an average £360k in May to £300k in June – however, only two detached homes were actually sold in the area in June – which explains why the  movement in average prices was so exaggerated. Flats are the most frequently purchased property  type in Inverclyde, and these increased in price from an average £78k in May to £82k in June – a far  more reasonable movement in prices over the month.

It is interesting to note that four of the bottom five local authorities by value all saw prices fall in the  month, which as we commented earlier suggests that the lower-priced sector of the market is not  seeing the same level of competition as is being experienced at the higher end of the market, thus  allowing prices to fall.  

Peak Prices  

Each month, we highlight the local authority areas which have reached a  new record in their average house prices. In June, there are 13 such authorities, four less than in May.  We can also add that Scotland itself has set a record average price in June 2022 – the sixth of this calendar year. 

Heat Map  

30 of the 32 local authority areas in Scotland have seen a rise in their average  property values over the last year, the two exceptions being Na h-Eileanan Siar and Inverclyde.

The  highest increase over the twelve months to June 2022 was in Argyll and Bute at 25.5%. 19 of the 32  local authority areas had price growth in excess of 10.0%.

Annual Scottish house price growth now 8.4%, says Walker Fraser Steele

Key points:

  • Annual Scottish house price growth now 8.4% – highest in 2022
  • Average Scottish house price is £220,870,  
  • Second-highest number of May transactions in last 10 years
  • 21 of 32 Local Authorities had rising prices in the month – same as in April
  • Largest annual increase at 22.6% in Argyle & Bute
  • 17 Local Authorities reached peak prices – 3 more than in April

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “One would never claim any market is bullet proof but on the current evidence Scotland’s property market remains at the very least in robust form. The rise in interest rates and the increase in the cost of-living are not yet having a marked impact on house price growth.

“The average price paid for a house in Scotland in May 2022 according to our data is £220,870, establishing yet another record price for the country – the eleventh occasion that this has happened in the last twelve months. This price is some £17,100 higher than that seen in May 2021, meaning that prices have risen by 8.4% on an annual basis. This annual growth rate is the highest recorded to date in 2022.

“The market transaction data too is robust – defying any expectations of a slow-down on this evidence. The provisional figure for May 2022 is 9,092 transactions, which is the second highest May figure of the last ten years – the highest having taken place in 2019, being the year before the pandemic struck.

“Ultimately demand is strong, but the supply of desirable stock remains low. Property prices are therefore seemingly more resilient in the face of rising borrowing costs.

“Over and above homebuyers, property remains attractive to investors too as it continues to outperform other assets such as equities, which are affected more acutely by higher borrowing costs.”

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

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

Commentary: John Tindale, Acadata Senior Housing Analyst

The May housing market

The average price paid for a house in Scotland in May 2022 is £220,870, establishing yet another record price for the country – the eleventh occasion that this has happened in the last twelve months.

This price is some £17,100 higher than that seen in May 2021, meaning that prices have risen by 8.4% on an annual basis. This annual growth rate is the highest recorded to date in 2022, although rates for the ten months from February 2021 to November 2021 inclusive were at the same level or higher – see Figure 1 below – with the blue horizontal line highlighting May’s growth rate of 8.4%.

Figure 1. The annual rate of house price growth in Scotland over the period May 2020 to May 2022 with trendline

On a monthly basis, prices in May 2022 rose by 1.0%, or close to £2,300. This monthly increase is almost double that recorded in April (0.6%), with rates currently oscillating on a monthly basis from December 2021 onward.

As we show on page 4, transactions remain relatively strong, with April sales being at a ten-year high for the month. Data for May sales have not yet fully emerged from the Registers of Scotland, but preliminary figures suggest that the total for the month will also prove to be amongst the highest of the last ten years.

We show on page 5 that high-value transactions are, in general, continuing to occur at record levels in 2022, compared to the previous seven years, with Edinburgh accounting for 50% of all sales in Scotland having a value of £750k or higher.

Transactions analysis

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

During the month of May, RoS has been processing further registrations with an entry date of April 2022, which provides us with an update on the number of transactions that took place in the month. The latest total for Scotland during April 2022 is now 8,232 sales, which is the highest number in the month of the last ten years. This suggests that the housing market in Scotland remains resilient, despite the potential headwinds of interest rate rises and the cost-of-living increases, which have been widely publicised in the press.

The provisional figure for May 2022 is 9,092 transactions, which is the second highest May figure of the last ten years – the highest having taken place in 2019, being the year before the pandemic struck.

In general, the peak month for sales in Scotland is August, with an average 9,350 transactions, so we can anticipate reporting on a slow build in the number of properties being sold over the next three months.

RICS (Royal Institution of Chartered Surveyors) in its May Residential Market Survey, is reporting that buyer enquiries are currently negative in Scotland, indicating there is less demand for homes this month, compared to a positive score seen over the last three months. However, RICS also notes that new vendor instructions are similarly lower this month, compared to the previous three months. On balance, RICS believes these two indicators are likely to balance each other out, leaving little change in house prices.

Figure 2. The number of sales per month recorded by RoS based on entry date (RoS applications date for May 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 – May 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 58 sales in excess of £750k during May 2022, and we anticipate that this number will increase as further sales for the month are processed by the Registers of Scotland. It is therefore quite likely that, excluding March 2021, we can report that in every month in 2022 there has been an increase in the number of properties sold in excess of £750k, compared to the same month from 2016 onward. The reason that March 2021 is excluded from the analysis is that it was exceptional, with sales being enhanced since it was the final month in which purchasers could take advantage of the LBTT tax holiday.

The rise in the number of high-value homes being purchased in 2022 is an indication that the “lifestyle changes” associated with the pandemic – “working from home” and the “race for space” – are still strong features of the current housing market. This, as we discuss on page 7, has resulted in strong competition for the properties that meet these requirements, with substantial price rises being seen at the top-end of the market.

The five authorities with the largest number of the 355 high-value sales that have been recorded to date in 2022 are: Edinburgh (179); Fife (21); Glasgow City (21); East Lothian (20); and finally East Renfrewshire (15). It can be seen from these figures 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 May 2021, April 2022 and May 2022

Table 3 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for May 2021, as well as for April and May 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 May 2022. Local Authority areas shaded in blue experienced record average house prices in May 2022.

Annual change

The average house price in Scotland has increased by some £17,100 – or 8.4% – over the last twelve months, to the end of May. This is a £1,500 increase over the £15,600 growth in prices seen in the twelve months to the end of April 2022

In May 2022, 31 of the 32 local authority areas in Scotland saw their average prices rise over the levels seen twelve months earlier – the one exception being West Dunbartonshire, where prices fell by -0.1%. In West Dunbartonshire, it was the average price of terraced properties that saw the most significant fall, from an average £130k in May 2021 to £120k twelve months later.

The area with the highest annual increase in average house prices in May 2022 was Argyll and Bute, where values have risen by 22.6% over the year. Last month we reported on the sale of a 5-bedroom detached home, located just outside Oban, in Argyll and Bute, having an asking price of £485,000, but selling for £600,000. This month there is a further example, with a five-bedroom detached property in Colintraive, overlooking Loch Riddon, having a guide price of £550,000, but being sold for £650,000. Two examples, in the same area, of the way in which competition for homes in remote beauty spots can result in a noticeable increase in average house prices.

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 May that account for 44% of the £17,100 increase in Scotland’s average house price over the year. The five areas in descending order of influence are: – Edinburgh (16%), Glasgow (8%); Fife (8%); South Lanarkshire (7%); and Argyll and Bute (5%).

Monthly change

In May 2022, Scotland’s average house price in the month rose by some £2,300, or 1.0%, which is near double the 0.6% increase seen in April. The average price in Scotland now stands at £220,870, which sets a record level for the nation for the eleventh month in succession.

In May 2022, 21of the 32 Local Authority areas in Scotland experienced rising prices in the month, the same number as in April. The largest increase in average prices in May, of 9.6%, was in Stirling, where the average price of detached homes increased from £377k in April to £417k in May. The average price for detached homes was elevated in the month by the sale of a five-bedroom detached Victorian villa in the King’s Park area of Stirling, for £875k, the third-most expensive property of the calendar year.

It is interesting to observe that the bottom four authorities in Table 3 above, which represent the four lowest priced areas in Scotland, have all seen price falls in the month – perhaps suggesting that the competition between buyers for homes is not so intense at the lower end of the price spectrum.

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 May, there are 17 such authorities, three more than in April. We can also add that Scotland itself has set a record average price in May 2022 – the fifth of this calendar year.

Heat Map

The heat map below shows the rate of house price growth for the 12 months ending May 2022. As reported above, 31 local authority areas in Scotland have seen a rise in their average property values over the last year, the one exception being West Dunbartonshire. The highest increase over the twelve months to May 2022 was in Argyll and Bute at 22.6%.

Comparisons with Scotland

Figure 3. Scotland house prices, compared with England and Wales, Wales, North East and North West for the period January 2005-May 202

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–May 2022

Scotland’s Eight Cities

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

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

ENDS

Annual Scottish house price growth at 6.2%

  • Competition for high-value homes persisting
  • 31 of 32 Local Authority Areas continue to see price increases over last twelve months
  • Average Scottish house price now at £218,992, up 0.5% on February, up 6.2% annually

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

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “Our data this month shows Scottish house prices continue to edge upwards. Modestly positive increases across the board continue to be the trend.

“The average house price in Scotland has increased by some £12,700 – or 6.2% – over the last twelve months, to the end of March. The average price paid, £218,992, sets another record and is the seventh time that this has happened in the last twelve months.

“On a monthly basis, prices in March 2022 rose by 0.5%, or close to £1,120. This monthly increase is lower than the revised 1.2% recorded in February, but surpasses the 0.1% that was seen in December 2021, three months earlier.

“It appears that the lack of good stock coming onto the market continues to support prices. This is in the face of some significant cost-of-living challenges too. We cannot know what that means for future performance, but we do know that high inflation makes property an attractive asset for investors when other assets do not offer such great returns. While you might think the future is uncertain, regional markets will perform differently for very specific reasons (think Aberdeen and oil) driving national averages.

“In our data, 31 of the 32 local authority areas in Scotland saw their average prices rise over the previous twelve months, one more than in February. On a monthly basis, on the mainland, the largest increase in prices was in Argyll and Bute, where values rose across all property types except for flats.”

Commentary: John Tindale, Acadata Senior Housing Analyst

The March housing market

The average price paid for a house in Scotland in March 2022 was £218,992, setting yet another record price for the country – the seventh occasion that this has happened in the last twelve months.

This price is some £12,700 higher than that seen in March 2021, meaning that prices have risen by 6.2% on an annual basis. This increase is 1.6% lower than the revised 7.8% seen in February 2022, and is in fact the lowest annual rate recorded since November 2020 – some 16 months earlier.

On a monthly basis, prices in March 2022 rose by 0.5%, or close to £1,120. Again, this monthly increase is lower than the revised 1.2% recorded in February, but surpasses the 0.1% that was seen in December 2021, three months earlier.

The housing market growth rates would therefore appear to be slowing in March, although as Figure 1 below shows, house prices are continuing to climb, with the slowdown in rates being almost imperceptible. It should also be borne in mind that house prices in March 2021 had an upward blip, (see Figure 1), being one month ahead of the termination of the LBTT tax holiday in Scotland on 1st April 2021.

The ending of the tax holiday in April 2021 prompted an increase in the number of transactions that took place in March 2021 (Figure 2 below), as well as an increase in the number of high-value properties sold in the month (Table 2 below).

This followed as buyers brought forward their actual purchases into March 2021 – or even earlier – to take advantage of the tax savings available. It can therefore be concluded that the cause of the slowdown in annual rates in March 2022 is due to the higher-than-normal values that were current in March 2021, distorting the annual comparison.

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

Looking at the England and Wales housing markets, we find that all regions showed an average increase of +2.3% in house price growth in March 2022, compared to Scotland’s fall of -1.6%. However, also relevant is the fact that the ending of the equivalent LBTT stamp duty tax holiday in Wales didn’t occur until June 2021, whilst in England the tax holiday continued up to the end of September 2021.

England and Wales did not therefore experience the same upward movement in prices in March 2021, as was seen in Scotland, and hence comparisons in March 2022 across the three countries can be misleading.

We anticipate, other things being equal, that annual rates of house price growth in Scotland will bounce back in April 2022, as the effect of the March 2021 blip begins to decline.

Transactions analysis

Figure 2 below shows the monthly transaction count for purchases during the period January 2015 to March 2022, based on RoS (Registers of Scotland) figures for the Date of Entry. (March 2022 figures are based on RoS Application dates.) The graph shows that sales volumes generally pick up in March of each year, especially when compared to February, which is generally the quietest month of the year for house sales.

The March 2021 transaction total, at 12,237 sales, is the highest of the eight years shown, for the reasons discussed on page 3 i.e. they were LBTT-related. The second-highest March occurred in 2016, with 11,017 sales. This occurred as the result of a pre-announced 3% additional charge to be added to the LBTT – on second homes and buy-to-let properties – which came into force on 1st April 2016.

If we remove the pandemic-related years 2020 – 2022 from the calculations, then the average number of sales in March for the seven years 2013 – 2019 amounts to 8,241 transactions, compared to August, which has the maximum number of sales of any month at an average 9,368 transactions. The March 2022 transaction total of 8,046 sales is therefore close to average, although it is based on RoS Application Dates, as opposed to the Date of Entry, which we use for all our transaction counts, except for the latest month.

Looking at the first three months of each year, then 2022 is currently the fourth highest of the eight years charted.

Figure 2. The number of sales per month recorded by RoS based on entry date (RoS applications date for March

Scotland transactions of £750k or higher

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

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 43 sales in excess of £750k during March 2022, and we anticipate that this number will increase as further sales for the month are processed by the Registers of Scotland. However, it is extremely unlikely that the March 2022 total will exceed that of March 2021, as the latter total of 115 sales was enhanced due to it being the final month in which purchasers could take advantage of the LBTT tax holiday, which came into existence on 15th July 2020.

The total for March 2015 was also exaggerated, as it was the final month before Scotland’s LBTT tax scheme started, at rates higher than the SDLT charges (for high-value properties) which had previously applied to the whole of the UK.

If we exclude these two exceptional events, then the total number of high-value sales during the first three months of 2022 is the highest of the last eight years. This is an indication that the “lifestyle changes” associated with the pandemic arising from “working from home” and the “need for space” are still strong features of the current housing market. This in turn has resulted in strong competition for the properties that meet these requirements, with substantial price rises being seen at the top end of the market.

The six authorities with the largest number of the 194 high-value sales that have been recorded to date in 2022 are: Edinburgh (94); Glasgow City (14); Fife (14); East Renfrewshire (10); East Lothian (9); and finally East Dunbartonshire (7).

Local Authority Analysis

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

Table 3 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for March 2021, as well as for February and March 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 March 2022. Local Authority areas shaded in blue experienced record average house prices in March 2022.

Annual change

The average house price in Scotland has increased by some £12,700 – or 6.2% – over the last twelve months, to the end of March. This is a £3,100 decrease over the revised £15,800 growth in prices seen in the twelve months to the end of February 2022.

In March 2022, 31 of the 32 local authority areas in Scotland saw their average prices rise over the previous twelve months, one more than in February. The one area experiencing a price fall in March was Aberdeen City, down by 2.9% over the year. 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, as we suggested last month, there is a strong correlation between house prices and the price of crude oil: we are hence anticipating that property values will begin to increase relatively soon, following the recent dramatic rise in the price of oil.

The area with the highest annual increase in average house prices in March 2022 was Fife, where values have risen by 15.9% over the year. The average price paid for a property in Fife in March 2022 has been elevated by the sale of an apartment at the Hamilton Grand complex for £2 million. This is the sixth apartment at the Hamilton Grand to be sold in the last twelve months. One of the many features of the Hamilton Grand is that it overlooks the final hole of the Old Course at St Andrews – which must be one of the best places in the world to live if you are a golf fan.

Monthly change

In March 2022, Scotland’s average house price in the month rose by some £1,125, or 0.5%, which is less than half of the £2,500 increase seen in February. The average price of a home in Scotland now stands at £218,992, which sets a new record level for the nation for the seventh time in the last twelve months.

In March 2022, 18 of the 32 Local Authority areas in Scotland experienced rising prices in the month, three fewer than one month earlier. The largest increase in average prices in March – of 8.2% – was in the Shetland Islands, where the average price of detached homes increased from £170k in February to £205k in March.

On the mainland, the largest increase in prices was in Argyll and Bute, where values rose across all property types except for flats. Perhaps the most interesting sale in Argyll and Bute in March was Tervine House, a five-bedroom detached home, located in Kilchrenan, with its own private jetty and fishing rights to Loch Awe. To reach Kilchrenan, it is necessary to drive down a seven-mile-long minor road, which comes to its end in the village. The property was originally put on the market for £575k but sold for £802k, being indicative of the strong competition that exists for homes that match the pandemic “lifestyle change” needs, of wide-open spaces in scenic locations.

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 March there are 13 such authorities, five fewer than in February. We can also add that Scotland itself has set a record average price in March 2022 – the third of the year.

Heat Map

The heat map below shows the rate of house price growth for the 12 months ending March 2022. As reported above, all but one of the 32 local authority areas in Scotland are reporting an increase in their house values over the last year. The area with negative growth is Aberdeen City, where prices over the year have fallen by -2.9%. The highest increase over the twelve months to March 2022 was in Fife at 15.9%, followed by Argyll and Bute at 15.3%.

Comparisons with Scotland

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

Scotland’s Seven Cities

Figure 5. Average house prices for Scotland’s seven cities from January 2021–March 2022

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

Monopoly reimagined

WHAT WOULD THE BOARD LOOK LIKE WITH MODERN HOUSES PRICES?

  • The board gets a reshuffle, with Whitehall and Strand now some of the most expensive places in London, with prices increasing over 700% in the past 25 years alone
  • Victor Watson’s 1935 selection looks to be completely different
  • Old Kent Road and The Angel, Islington still among the cheapest

While the original 1935 order of the Monopoly board was loosely based on property values at the time, new research has revealed what the board could look like with modern property values.

The research by gaming experts SolitaireBliss analysed the average sale price of each area since 2015 to see what the order of the board would look like nowadays. It also looks at property size to see each area’s average ‘price per metre’.

It found that Mayfair still sits as the most expensive area with an average sale price of £6,830,154. Strand, which was once halfway down the board as a red tile, is now the second most expensive area, with an average sale price of £5,438,715.

One of the most significant differences in Whitehall, which has now seen itself be moved 13 spots up the board to a green tile, with an average sale price of £4,393,652. Adjusted for inflation, 1935 prices would see Mayfair worth only £93,911, Strand worth only £74,799 and Whitehall worth only £60,410.

Whitechapel Road, The Angel Islington and Old Kent Road remain as the three cheapest on the board.

Oxford Street, which was previously one of the most expensive tiles on the classic board, has been moved down 13 places, with an average sale price of £1,019,975. Coventry Street has also seen a significant reshuffle, being pushed down 11 spots to now be a light blue tile. Adjusted for inflation, a 1935 property in Oxford Street would cost you only £14,020 on average.

StreetAverage sale priceAverage price per metreOriginal order
Mayfair£6,830,154£29,338Mayfair
Strand£5,438,715£30,945Park Lane
Whitehall£4,393,652£23,847Bond Street
Trafalgar Square£3,786,694£23,964Oxford Street
Piccadilly£3,706,235£28,958Regent Street
Vine Street£3,629,885£34,276Piccadilly
Park Lane£3,113,750£25,554Coventry Street
Bond Street£2,230,125£21,311Leicester Square
Bow Street£2,153,900£20,584Trafalgar Square
Pall Mall£2,041,488£16,445Fleet Street
Marlborough Street£1,890,650£17,628The Strand
Regent Street£1,861,179£25,127Vine Street
Fleet Street£1,480,313£21,101Marlborough Street
Northumberland Avenue£1,310,257£15,168Bow Street
Euston Road£1,110,000£12,658Northumberland Avenue
Pentonville Road£1,052,125£17,311Whitehall
Oxford Street£1,019,975£13,478Pall Mall
Coventry Street£796,774£18,598Pentonville Road
Leicester Square£670,779£11,950Euston Road
Old Kent Road£539,438£10,261The Angel Islington
The Angel Islington£501,117£6,706Whitechapel Road
Whitechapel Road£423,509£8,998Old Kent Road

In terms of looking at the average ‘price per metre’, The Angel, Islington comes in as having the lowest price per metre of £6,706.

Whitechapel Road and Old Kent Road are the second and third cheapest. Vine Street has the highest price per metre with £34,276, along with Strand and Mayfair coming in second and third.

A spokesperson from SolitaireBliss said: “What can be looked at as simply a modernisation of the legendary Monopoly board game, can also be viewed as an illustration of current house prices in the capital.

“It’s interesting to see how more commercial areas have seen huge changes with the likes of Oxford Street and Whitehall, whereas more residential areas such as Old Kent Road and Whitechapel Road have seen a steady and consistent with housing cost trends.”

This study was conducted by SolitaireBliss, an online gaming service with a wide array of card games and challenges available to play for free.