Midlothian becomes fifth local authority with average property prices above £300,000
Average Scottish house price now £223,525, up 1.4% on February, up 1.9% annually
Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “In March, average property prices in Scotland increased by 1.4%, or almost £3,000, following a five month decline.
“This was a far stronger performance than that witnessed in the English and Welsh markets. Scotland’s average house price is currently just over £223,500, which is about £300 less than its high price from June 2023.
“This significant turnaround speaks volumes about the negligible movement we have seen in recent months.
“Four authorities—Midlothian, Argyll and Bute, Falkirk, and Inverclyde—achieved new heights in terms of their regional average values and the total number of local authorities reporting rising prices was twenty-one, the highest since May of last year – another clear and welcome sign that the market is beginning to stabilize.
“Of particular note is the 1.5% increase for Midlothian which made it the fifth local authority with average property prices above £300,000.
“It’s too early to assume the cost of living pressures are abating but mortgage pricing has been keen over the last couple of months as lenders fight for borrowers. With a general election due this year, we know housing is a key issue for voters and we may yet see some further promises made to buyers and owners before a vote later this year. That would give further impetus to this positive trajectory.”
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Housing market commentary
After falling for five months in a row, average house prices picked up in March by 1.4%, some £3,000, and a positive outcome compared to markets in England and Wales. Scotland’s average house price now stands a little above £223,500, that is within £300 of its peak level reached in June 2023. The seemingly marked turn-round speaks volumes about the narrow tramlines within which the market has moved over the past year.
Figure 1. Weakness in prices appears to have ended
Scotland’s brief flirtation with annual price falls last December has been short-lived. The market swung firmly back into positive territory in March, climbing by more than £4,000 and 1.9% from a year earlier, as Figure 1 shows. This is the strongest performance in more than a year and compares favourably with that seen south of the border over recent months.
Table 1. Average prices in Scotland for Mar 2023 – Mar 2024
Local Authority prices
Table 2. How prices in March 2024 compare
Twenty one local authorities experienced rising prices in the month – the highest number since May last year and a further sign that the housing market is stabilising. Higher values helped four authorities – Midlothian, Argyll and Bute, Falkirk and Inverclyde – to reach new peaks.
The five most expensive local authorities all reported higher prices in March, albeit marginally so in the case of East Lothian. A 1.5% increase for Midlothian made it the fifth local authority with average property prices above £300,000.
Figure 2. How prices have changed between March 2023 and March 2004, by local authority
As can be seen from the heat map, in March the vast majority of local authorities (24) reported stronger prices than a year ago, the highest number since February 2023.
Inverclyde reported a double-digit percentage increase in prices over the year for the second month in a row. That said, we would not read too much into these figures, distorted as they are by a period of price weakness the year earlier.
Transactions analysis
Figure 3. Monthly sales over the most recent year compared with a year earlier
The housing market has been lacklustre over much of the past year. For 2023 as a whole, sales totalled 91,600 properties, which is 12% down on 2022 and not much above the Covid-induced lows of 2020.
But the headwinds have eased over the past few months, helped by more attractive mortgage pricing and easing cost-of-living pressures. As can be seen in Figure 3, monthly sales are no longer lagging materially below year-earlier levels.
A positive shift in market sentiment helped lift sales in January marginally above those in January 2023 and sales for both February and March appear to be closely tracking year-earlier levels. Sales of property in the capital and of properties worth more than £750,000 already appear to be modestly outpacing the corresponding 2023 numbers.
For the time being, it is hard to know whether this is just a degree of stability returning to the market or a more significant recovery story.
Sales are still down on pre-Covid levels and market confidence is likely to be sensitive to changing market expectations of interest rates and political uncertainties.
However, without doubt analysts’ expectations of significant price falls across Scotland, Wales and England in 2024 have fallen away over the past few months and forecasts have been revised upwards to suggest Scotland may see modest price growth over the year.
While there remain uncertainties around interest rates and mortgage pricing, there is a general sense that the worst is behind us. The pent-up demand that built up over 2023 and into 2024 is beginning to come through and that should be reflected in prices.
There may also be a move by the UK government to help support first-time buyers in the run-up to the General Election which could add further momentum.
Midlothian has highest mainland annual growth rate in January at 9.9%
City of Edinburgh the largest weighted fall in prices annually
Rising prices in 16 local authorities over year, as in December
2023 total transactions lowest since 2013
Average Scottish House Price now £221,693, unchanged on December, 0,2% up annually
Scott Jack, Regional Development Director at Walker Fraser Steele, comments:“This month saw negligible movement in the monthly house price, with January’s transaction figures telling a story of a market whose home movers are doing so out of necessity rather than discretion.
“This may change as rates settle but for now the impact of prices is clear. The January average house price figure stands at £221,693, which only differs by -£19 from the revised figure for December.
“However, as we have noted before, it is only when we look under the bonnet of the national headline that we can see there has been considerable variation at a local level. Our analysis shows that 16 local authority enjoyed price rises in the month and 16 with price falls, ranging from +9.7% in Inverclyde to -4.2% in Moray.
“From January 2023 to January 2024, Midlothian, Aberdeen City, East Renfrewshire and Stirling account for 50% of the gains which have been made over the year, and all have all seen a reasonably large increase in the average price of detached homes.
“On an annual basis there is a slightly larger movement in values, with prices in January 2024 having increased by £520, or +0.2%, compared to a fall in December 2023 of -£670, or -0.3%, over the year. This positive movement may herald a slightly broader improvement as lower mortgage rates, alongside expectations of Bank of England interest rate cuts in the second half of the year, should help buyer confidence in the short term.”
Commentary: John Tindale, Acadata Senior Housing Analyst
January’s housing market
Once again Scotland’s average house price has barely changed in the current month, with January’s average figure at £221,693, which only differs by -£19 from the revised figure for December. However, as in several recent months, the national average of “zero change” masks considerable variation in prices at the more local level. For example, in January, there are 16 local authority areas with price rises in the month and 16 with price falls, ranging from +9.7% in Inverclyde to -4.2% in Moray.
On an annual basis there is a slightly larger movement in values, with prices in January 2024 having increased by £520, or +0.2%, compared to a fall in December 2023 of -£670, or -0.3%, over the year. Again, on an annual basis, there are 16 local authority areas with price rises and 16 with price falls, the same number as seen in December. The movements in average prices at local authority level for the month and year are shown in Table 2 on the next page.
Looking at the weighted movement in prices, from January 2023 to January 2024, there are four local authority areas that account for 50% of the gains which have been made over the year, namely (with the percentage of the 50% gain in brackets): – Midlothian (+16%), Aberdeen City (+13%), East Renfrewshire (+12%) and Stirling (+9%). The one common feature of the four areas is that they have all seen a reasonably large increase in the average price of detached homes.
Interestingly, over the same twelve-month time period, the City of Edinburgh has had the largest fall in prices, accounting for -18% of the reduction in average values in Scotland on a weight adjusted basis.
The majority of this fall in Edinburgh arises from the drop in average values of terraced properties and to a lesser extent semi-detached homes, while the average price of detached homes and flats has continued to rise.
Terraces in Edinburgh do of course include some magnificent examples of grand Georgian architecture, as evidenced by the highest-priced property sale of the month (as described on page 6), with the average price of terraces in Edinburgh being £360k, double that of the average for Scotland at £180k.
Figure 1.Scotland’s average house price for the period from January 2022 to January 2024
Figure 1 shows how average house prices in Scotland have changed over the two years from January 2022. It can be seen that there was a slight dip in prices over the period from December 2022 to March 2023, which may be about to repeat itself, albeit to a lesser extent, some twelve months later. However, aside from this small dip, average prices have been relatively stable over the seventeen months from July 2022 to November 2023.
Local Authority Analysis
Table 2. Average House Prices in Scotland, by local authority area, comparing December 2022, November 2023 and December 2023
Table 2 above shows average house prices, calculated on a seasonal- and mix-adjusted basis, by Local Authority Area, for January and December 2023 and January 2024, together with the corresponding percentage price changes over the last month and year. The ranking figures are based on average house prices in January 2023 and 2024. Line items are shaded in blue in cases where average house prices in the Local Authority Area have experienced record highs in January 2024.
Annual change
The average house price in Scotland in January 2024 has increased by £520, or 0.2%, over the last twelve months, which is 0.5% higher than the revised rate of -0.3% in December 2023, one month earlier. The revised December 2023 figure of -0.3% is the first time the annual growth rate has been negative since May 2016, some seven and a half years earlier.
In January 2024, 16 of the 32 local authorities in Scotland were reporting a positive movement in prices over the previous twelve months, the same number as in December 2023.
Midlothian had the highest annual rate of price growth in January of all local authority areas on the mainland, at 9.9%, having been in second position in December. In Midlothian, all property types have seen an increase in values over the last twelve months, with detached homes and terraces having the largest influence on prices, with two new-build detached homes selling in Roslin, some seven miles south of Edinburgh, for £715k apiece.
Staying on the mainland, Stirling has the second-highest annual growth rate at 7.4%. All property types – except semi-detached – have experienced average price increases in Stirling, but this month it is flats that have seen the most significant rise, up from an average £145k in January 2023 to £185k one year later, assisted by the sale of a three-bed penthouse apartment in the Bridge of Allan, for £410k.
At the other end of the scale, the area on the mainland with the largest percentage fall in prices over the last twelve months was West Dunbartonshire, at -8.5%. In West Dunbartonshire, all property types saw prices fall over the year, with the largest fall this month being flats, down from an average £100k in January 2023 to £95k one year later. This means that West Dunbartonshire now has the seventh-lowest average price for flats in Scotland’s 32 local authority areas.
Monthly change
In January 2024, Scotland’s average house price fell by just -£19, or 0.0%, which contrasts with the revised -£1,250, or -0.6%, change in prices in December 2023. Scotland’s average house price now stands at £221,693, a level first reached in July 2022.
In January 2024, 16 of the 32 Local Authority areas in Scotland experienced rising prices in the month, the same number as seen in December 2023. The area with the highest increase in its average price in the month was Inverclyde, up by 9.7%. All property types saw an increase in their average prices in Inverclyde, with the largest rise being in detached properties, assisted by the sale of a recently renovated five-bedroom detached home, located in Kilmacolm, some 15 miles to the west of Glasgow, for £1.4 million.
In second place, with a monthly increase of 5.6% is East Ayrshire. All property types, except for terraces, saw an increase in prices in the month, with semi-detached homes rising from an average £143k in December 2023 to £160k in January 2024. The increase in average prices in the month was assisted by the sale of a £767k detached property in Dunlop, some seven miles north of Kilmarnock.
By way of contrast, the area on the mainland with the largest monthly fall in its average price was Moray, down by -4.2% in the month. All property prices saw a fall in Moray in January, with the largest being in terraced homes, down from an average £156k in December to £148k in January – although January tends to be a quiet market, with only 13 terraced sales having been recorded to date in the month.
For interest, the highest-priced residential property to have been sold in Scotland in January 2024 was a four/five-bedroom Georgian terraced home in Great King Street, New Town, Edinburgh, which forms part of the UNESCO World Heritage site – it fetched £2.25 million.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2019 to January 2024, based on Registers of Scotland (RoS) figures for the Date of Entry (except for January 2024, which is based on RoS Application Dates).
The first year on the chart, 2019 (light blue line), was relatively “normal” having an average 8,560 sales per month, some 2.1% higher than the total for 2018, but -0.3% lower than 2017.
As can be seen, 2020 (the turquoise line) was more varied, the Covid pandemic having manifested itself in March 2020, with the first lockdown taking place in April 2020, when the market slumped to just 2,637 sales. There was then a slow path to recovery during the remainder of 2020, with a peak in transactions in October 2020 of 13,045 sales, as the benefit of the LBTT tax holiday and the mantras of the “race for space” and “work from home” came to the fore.
There was a second peak in transactions in March 2021 (the brown line), as purchasers scrambled to take advantage of the tax holiday, before its cessation on April 1st 2021. In 2022 (the red line), house purchases returned to near normality, with the first nine months of 2022 seeing an average 8,600 sales per month. However, Liz Truss came into power on 6 September 2022, with her mini-budget, which resulted in the bank base rate being raised to 2.25%. The bank rate was further increased on 3rd November and 15th December 2022, ending the year at 3.5%.
Figure 2.The number of sales per month recorded by RoS based on entry date from 2019 – 2024
This brings us to 2023 (the yellow line) – the relatively high bank rate of 3.5% had an adverse effect on property transactions, with only 5,915 sales for January 2023 – the lowest January total since 2013. Although the housing market in 2023 did enjoy the spring bounce in transactions that occurs traditionally in March, the bank base rate was increased a further five times in 2023, reaching 5.25% on 3rd August 2023 (the current rate). Over the twelve months of 2023, sales have amounted to some 91,200 properties, which is 12.0% down on 2022 and is the lowest annual total since 2013.
Sales for January 2024 are still being processed, but early indications are that total sales will be even lower than January 2023.
Scotland transactions of £750k or higher
Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – January 2024
Table 3 shows the number of transactions per month in Scotland which are equal to or greater than £750k. The threshold of £750k has been selected as it is the breakpoint at which the highest rate of LBTT becomes payable.
There were 59 such transactions recorded by RoS during January 2024. Currently, this is the fourth-highest January total recorded to date, but with RoS processing further data for the month, it may possibly rise to third place in the yearly rankings – this will become evident next month. Following the pandemic, July 2022 had the highest monthly total of 137 sales over £750k, when transaction counts were still “catching-up” with the lost months of the pandemic years.
Looking at the total number of high-value properties sold in each year in Table 3, 2022 is ranked first with 1,231 high-value sales, 2021 is in second place with 1,102 sales, while 2023, with 1,071 sales, is ranked third.
However, there is a clear trend, in that the totals in each month of 2023 are lower than, or equal to a year earlier. In aggregate, the high-value 2023 transactions are currently down on the 2022 total by 13%, compared to a 12% downturn in sales volumes in the market as a whole, indicating that last year’s enthusiasm for the purchase of high-value homes has marginally decreased from a year earlier.
Edinburgh accounts for 474 of the 1,071 high-value sales (44%) that have been recorded by RoS in 2023, compared to 48% in 2022. In 2023, East Lothian finished in second place with 73 such sales, closely followed by Glasgow in third place with 69 sales. Glasgow is currently 9 sales ahead of fourth-placed East Renfrewshire, with 60 high-value sales, and finally we have two authorities in equal fifth position, being East Dunbartonshire and Fife, with 55 sales each.
Sales for January 2024 are still being processed by RoS, with 59 high value sales having been recorded to date, of which 25 relate to Edinburgh (42%).
Peak Prices
In Table 2 above, those areas which have reached a new record in their average house prices are highlighted in light blue. In January 2024, there was 1 such authority being Inverclyde, the same number (although not the same authority) as in December 2023. The movement of prices in Inverclyde in January 2024 has been discussed in the “Monthly Change” section on page 5 above.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending January 2024. As reported above, 16 of the 32 Local Authority Areas in Scotland have seen a rise in their average property values over the last year. The highest rise over the year was in Na h-Eileanan Siar, at 11.2% growth, with the largest fall in the year in the Orkney Islands at -14.0%.
How Scotland Compares
Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-January 2024 Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-January 2024
Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, North East and North West for the period January 2020–January 2024
Scotland’s Eight Cities
Figure 5. Average house prices for Scotland’s eight cities from November 2022–January 2024
Figure 6. Average house prices for Scotland’s eight cities January 2024
Prices are down £80 since May, compared to England and Wales which are down £5,500
Transactions are 11% lower than in 2022
Three Local Authority areas still reporting record average house prices
Average Scottish House Price now £223,354, down 0.3% on September, up 0.4% annually
Table 1. Average House Prices in Scotland for the period October 2022 – October 2023
(The prices are end-month smoothed over a 3 month period
Note: The Walker Fraser Steele Acadata House Price Index (Scotland) provides the “average of all prices paid for houses”, including those made with cash.
Scott Jack, Regional Development Director at Walker Fraser Steele, comments:“Our data shows that in October, the average house price in Scotland decreased by around -£650, or -0.3%, to £223,354.
“Scotland’s average house price has actually barely changed over the last five months, hovering in the £223,000 range. To put this in context, we need only compare to Wales and England, where average prices have decreased by £5,500 over the same period of time.
“There were price increases in just 12 Local Authority areas and of particular note is Stirling which saw the largest gain in average prices, and saw a surge in students at the beginning of the academic year, which contributed to an increase in the cost of apartments in the neighbourhood. Fife, by contrast, experienced the largest fall in prices in the month on a weight-adjusted basis, with all property types showing a fall.
“2023 has been a harder year. The rising base rate has adversely impacted property transactions. Although the housing market in 2023 did enjoy the traditional spring bounce in transactions that occurs in March, sales volumes from July 2023 onward have been below all previous years since 2013. Sales over the first ten months of 2023 are down by 11.3% compared to the equivalent period in 2022.
“I’m optimistic that with a stable base rate, lenders are now starting to compete for business with competitive mortgage rates which, with better inflation figures, should encourage transaction levels over and above those we expect from the remortgaging business due in the first quarter of next year.”
Commentary: John Tindale, Acadata Senior Housing Analyst
October’s housing market
Scotland’s average house price fell by some -£650, or -0.3%, in October, and now stands at £223,354. In fact, looking at Table 1 above, it can be seen that for the past five months, from May onwards, Scotland’s average house price has remained in the £223,000s, with only minor fluctuations over the period. This contrasts sharply with England and Wales, where average prices have fallen by £5,500 over the same timescale.
There were only 12 Local Authority areas with price rises during the month of October – but the rises tended to be quite large when expressed in monetary terms. The highest increase in average prices was in Stirling, where the average price increased by £7,700, assisted by the sale of a £1.4 million detached home in Dunblane. In addition, Stirling has also seen an influx of students at the start of the academic year which has helped to boost the price of flats in the area.
At the other end of the scale, Fife has experienced the largest fall in prices in the month on a weight-adjusted basis, with all property types showing a fall in prices – the largest fall being in flats, down from an average £143k in September to £138k one month later. Glasgow City had the second-largest fall in the month, with the largest reduction – on a weight-adjusted basis – also being in flats, with average prices in the month down from £190k to £187k. Fife and Glasgow combined accounted for 30% of the weight-adjusted price falls in the month.
Looking at the movement in average prices compared to twelve months earlier, there has been a gain of some £975, or 0.4%, in Scotland over the year. There were 17 Local Authority Areas with price rises for the twelve months ending October 2023, and 15 with price falls. Taking a weighted average of the top 16 areas by value, the gain in prices over the year amounted to £950, compared to a £25 gain for the bottom 16 areas by value. It can therefore be concluded that it is the higher value areas in Scotland that have experienced the majority of the price gains over the last twelve months.
Figure 1. Scotland’s average house price for the period from March 2020 to October 2023
Figure 1 shows how average house prices in Scotland have changed since the start of the Covid pandemic in March 2020. It can be seen that the average price has barely moved over the last twelve months, although values have risen by £40,350 from March 2020. This increase of 22.1% over the period compares to a figure of 19.9% in the CPIH Index – so in real terms (after allowing for consumer price inflation), the average house price in Scotland since the start of the pandemic has risen by 2.2%.
Local Authority Analysis
Table 2. Average House Prices in Scotland, by local authority area, comparing September 2022, August 2023 and September 2023
Table 2 shows average house prices, calculated on a seasonal- and mix-adjusted basis, by Local Authority Area for October 2022 and September and October 2023, together with the corresponding percentage price changes over the last month and year. The ranking figures are based on average house prices in October 2022 and 2023. Line items are shaded in blue in cases where average house prices in the Local Authority Area have experienced record highs in October 2023
Annual change
The average house price in Scotland in October 2023 has increased by some £975, or 0.4%, over the last twelve months, which is 0.4% lower than the 0.8% growth rate seen in September, one month earlier. This is the lowest annual growth rate since March 2019, nearly five years earlier.
In October, Clackmannanshire saw the highest increase in its annual rate of price growth, at 9.9%, but with only 44 sales in the month, contrasted with Edinburgh’s 612, the movements in average price will be unduly impacted by individual transactions, especially when expressed in percentage terms. Moray is in second place, with a more arithmetically significant 97 sales, with an average price gain of 8.3%. In Moray, all property types have seen prices rise over the year, with the largest increase being in semi-detached properties, up from an average £180k in October 2022 to £200k one year later.
At the other end of the scale, the area on the mainland with the largest percentage fall in prices over the last twelve months, for the second month running, was East Ayrshire, at -6.0%. In East Ayrshire, all property types – except for terraces – saw prices fall over the year, with the largest fall being detached homes, down by an average £20k over the last twelve months. At an average £264k, in October 2023, East Ayrshire is ranked 29th out of the 32 local authority areas in Scotland, by way of its detached property values. Despite the fall in the annual rate, 17 of the 32 local authorities were reporting a positive movement in prices over the previous twelve months, compared with 16 in September. However, Edinburgh had the largest fall in prices over the year when measured on a weight-adjusted basis (which takes into account both the number of sales and the nominal fall in average price), which singlehandedly counteracted some 30% of the positive movement in values in the 17 areas with price gains.
Monthly change
In October 2023, Scotland’s average house price fell by some -£650, or -0.3%, which contrasts with the +£750, or +0.3%, change in prices seen in September. This is the sixth monthly fall of 2023: however, it would appear that prices have been gently oscillating over the last five months, with the average price ranging between £223,000 – £224,000 since May 2023.
In October 2023, 12 of the 32 Local Authority areas in Scotland experienced rising prices in the month, four fewer than in September. The area on the mainland with the largest monthly price increase, for the second month, running was Stirling, up by 2.9%. Both detached properties and flats saw an increase in their average prices over the month, with a higher volume of flat sales being in evidence in Stirling at the start of the academic year.
East Renfrewshire tops Table 2 above for the second month in succession, displacing the City of Edinburgh to second place. Both East Renfrewshire and Edinburgh have been in the top position of having the highest average value for properties in five of the last twelve months, with East Lothian taking this position twice.
By way of interest, the highest-priced home to have been sold in Scotland in October was a £1.95 million five-bedroom detached home in Ravelston, Edinburgh, closely followed by a £1.875 million detached property in Milngavie, East Dunbartonshire. As mentioned last month, Milngavie is probably best known for its reservoirs, which supply Glasgow City with its water.
Peak Prices
In Table 2 above, those areas which have reached a new record in their average house prices are highlighted in light blue. In October 2023, there were 3 such authorities, down from 6 in September, the three areas being Stirling, Moray and Highland. The first two areas are mentioned above – in Highland the achievement of a record average price was assisted by the October sale of a 4-bedroom single story detached home, overlooking the Camusdarach beach, near Arisaig, for £1.1 million.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2007 to September 2023, based on Registers of Scotland (RoS) figures for the Date of Entry (except for September 2023, which is based on RoS Application Dates).
As can be seen, the market in 2007 was almost double the size of the levels taking place from 2008 – 2012, a period which was restricted by the credit crisis in the banking industry. From 2013 onwards, sales began to recover, with the average monthly transaction count reaching 7,027 in 2013. The market continued to grow – albeit slowly – reaching a mini-peak of 8,724 sales per month in 2017.
The pattern of sales during the year can be clearly seen in its various forms from 2010 to 2019. Typically, the year starts with two low sales months in January and February – the troughs on the graph – coinciding with the period of restricted daylight hours and the week-long break taken over the Christmas period. March typically sees a “spring bounce” as the market opens back up, with peaks in sales taking place during the summer. There is usually a small dip in sales during the Autumn, followed by a small flurry of activity in December, as buyers look to be in their “new home” before the New Year.
However, it can be seen that in early 2020, at the start of the pandemic and its associated lock-downs, the market slumped in April 2020, to just 2,537 sales. There was then a slow path to recovery during the remainder of 2020; a peak in transactions in March 2021 to 12,241 sales, being the last month of the LBTT tax holiday in Scotland; and the mildly enhanced market of 2022.
Figure 2. The number of sales per month recorded by RoS based on entry date from 2007 – 2023
This brings us to the current year of 2023 – the relatively high bank rate of 3.5% at the start of the year had an adverse effect on property transactions, with only 5,883 sales for January 2023 being recorded to date by the Registers of Scotland – the lowest January total since 2013. Although the housing market in 2023 did enjoy the traditional spring bounce in transactions that occurs in March, sales volumes from July 2023 onward have been below all previous years since 2013. Over the first ten months of 2023, sales are down by 11.3% compared to the equivalent period in 2022.
Scotland transactions of £750k or higher
Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – October 2023
Table 3 shows the number of transactions per month in Scotland which are equal to or greater than £750k. The threshold of £750k has been selected as it is the breakpoint at which the highest rate of LBTT becomes payable.
There were 77 such transactions recorded by RoS during the month relating to October 2023. Currently, this is the fourth-highest October total recorded to date, but with RoS processing further data for the month, it may possibly rise to third place in the yearly rankings. October 2020 had the second-highest monthly total of sales over £750k, arising from the “the race for space” which became popular during the latter part of 2020, as buyers searched for larger properties to enable comfortable “working from home”.
Looking at the number of high-value properties sold in the first ten months of each year in Table 3, 2022 is ranked first with 1,030 high-value sales. In second place is 2021- when sales were boosted in March, by the annual “spring-bounce” – with 922 sales in the ten-month period, while 2023, with 847 sales in the ten months, is ranked in third place.
However, there is a clear trend, in that the totals in each of the first ten months of 2023 are lower than a year earlier. In aggregate, the high-value 2023 transactions are currently down on their 2022 equivalent by 18%, compared to a 11% downturn in sales volumes in the market as a whole, indicating that last year’s enthusiasm for the purchase of high-value homes has dissipated.
Edinburgh accounts for 378 of the 847 high-value sales (45%) that have been recorded to date by RoS in 2023, compared to 48% in 2022. Glasgow is in second place with 61 such sales, East Lothian is in third place with 54, six ahead of Fife with 48, East Renfrewshire has 44 and East Dunbartonshire 43.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending October 2023. As reported above, 17 of the 32 Local Authority Areas in Scotland have seen a rise in their average property values over the last year. The highest rise over the year was seen in Clackmannanshire, at 9.9 growth, with the largest fall in the year in the Orkney Islands at -14.5%.
How Scotland Compares
Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-October 2023
Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, North East and North West for the period January 2020–October 2023
Scotland’s Eight Cities
Figure 5. Average house prices for Scotland’s eight cities from August 2022–October 2023
Figure 6. Average house prices for Scotland’s eight cities October 2023
July House Price Index from Chartered Surveyors, Walker Fraser Steele:
Scottish House Prices in July edge down from record highs
Transactions continue to languish
Demand for higher-value properties decreasing
A small majority of local authorities see annual price falls
Glasgow reports record high prices
Average Scottish House price in July £223,035, down 0.4% on June, 0.3% up annually
Table 1. Average House Prices in Scotland for the period July 2022 – July 2023
Scott Jack, Regional Development Director at Walker Fraser Steele, comments:
“With the end of interest rates rises perhaps in sight, we may yet see better news in the coming months for house price growth. But for now, the picture in July is less rosy as the housing market contracted due to the persistent challenges from rising interest rates, cost of living increases, and affordability pressures.
“All of these are conspiring to take the wind out of prospective buyers’ sails – not least new buyers who are particularly impacted by affordability challenges. However, with the announcement of the first sub-5% fixed rate mortgage in mid-September, we hope to see transactions increase and confidence to return to the market towards the end of the year.
“The pattern of slight monthly rises that we saw in prior months came to a stop when the average property price decreased by £900, or -0.4%. The average home price in Scotland is currently little over £223,000, which is still the third-highest month on record.
“Lack of supply of the right type of property will always support prices in the long-run, particularly given the news of builders slowing down or stopping developments. Not all sectors and geographies are affected equally by the headwinds either. There were almost equal numbers of local authorities reporting higher or lower prices in July 2023, with 15 of the 32 local authority areas in Scotland seeing their average prices rise above the levels of twelve months earlier and 17 authorities reporting price falls.”
Commentary: Bob Pannell, Acadata Senior Housing Analyst
July’s housing market
Scotland’s housing market retreated a little in July in the face of ongoing headwinds from higher interest rates, cost-of-living and affordability pressures. The average property price edged down by £900, or -0.4%, bringing to an end the pattern of small monthly increases seen in previous months. Scotland’s average house price now stands a little above £223,000, still the third-highest month on record.
Figure 1. Scotland’s average house price for the period from March 2020 to July 2023
Figure 1 shows how average house prices in Scotland have changed since the start of the Covid pandemic in March 2020. Prices have risen by £40,000 from £183,000 to £223,000 as at July 2023. The increase of 21.9% over the period compares to one of 18.8% in the CPIH Index – so in real terms (after allowing for consumer price inflation) the average house price in Scotland since the start of the pandemic has risen by around 3%.
House price inflation, measured year-on-year, remains in positive territory but only just – up 0.3% compared with July 2022. This represents a sea-change from just over a year ago, when Scotland briefly witnessed double-digit percentage increase in house prices. It also marks the weakest performance since early 2019, that is before the Covid epidemic.
Much of the adjustment to the more challenging conditions facing the housing market is coming through as lower levels of activity, with sales so far this year about 10% lower than the corresponding months of 2022. Whilst a significant correction, this is only about half that seen in England & Wales.
This pattern of subdued market prices and turnover may continue for some while. Nevertheless, with continuing strong earnings growth and financial markets beginning to look forward to official interest rates peaking, there are grounds for optimism that Scotland’s housing market will see a soft landing and subsequent recovery.
Local Authority Analysis
Table 2. Average House Prices in Scotland, by local authority area, comparing July 2022, June 2023 and July 2023
Table 2 shows average house prices, calculated on a seasonal- and mix-adjusted basis, by Local Authority Area for July 2023, June 2023 and July 2022, together with the corresponding percentage price changes over the last month and year. The ranking figures are based on average house prices. Line items are shaded in blue in cases where average house prices in the Local Authority area or Scotland as a whole have experienced record highs.
Annual change
The average house price in Scotland in July 2023 has increased by £762 – or 0.3% – over the last twelve months. This represents the weakest annual rate of growth since early 2019, before the Covid epidemic.
Although there were almost equal numbers of local authorities reporting higher or lower prices In July 2023, with 15 of the 32 local authority areas in Scotland seeing their average prices rise above the levels of twelve months earlier and 17 authorities reporting price falls, this was in fact the first net negative balance since 2016.
East Renfrewshire was the area on the mainland with the highest annual increase in average house prices in July 2023 – up 7.7% – followed by Midlothian (5.9%) and East Lothian (4.8%). Meanwhile, Stirling had the largest fall in prices over the previous twelve months, at -6.4%.
Despite the more subdued nature of the housing market recently, several local authorities – East Renfrewshire, Midlothian, North and South Lanarkshire and West Lothian – have reported year-onyear price rises every month over the past year (albeit negligible increases in July in the case of North Lanarkshire and West Lothian).
At the other end of the spectrum, Aberdeen was the only local authority in July to have consistently experienced annual house price falls every month over the past year. However, a total of 10 authorities have seen annual price falls for the last three months or more in a row.
Monthly change
In July 2023, Scotland’s average house price declined by some £900, or -0.4% – the worst outcome since February 2023, but broadly comparable with the modest declines seen over the first quarter as a whole.
In July 2023, 10 of the 32 Local Authority areas in Scotland experienced rising prices in the month, 20 saw price falls and price movements in two – Fife and Stirling – were negligible. The net balance fell from +2 in June to -10 in July.
The distribution of local authorities with price increases in July was reasonably even, with 5 in the top half when ranked by price and 5 in the lower half.
The largest increase in average prices in the month was in Argyll and Bute, up by 5.2%. In second and third places are Clackmannanshire (3.8%) and Na h-Eileanan Siar (3.0%).
Peak Prices
In Table 2 above, those areas which have reached a new record in their average house prices are highlighted in light blue. In July 2023, there were 3 such authorities, down from five in June. Interestingly, the highest local authority area with a record average price this month is Glasgow, ranked in 15th place by value and featuring for the second month in a row.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2021 to date, based on Registers of Scotland (RoS) figures for the Date of Entry (except for July 2023, which is based on RoS Application Dates).
As the focus here is on recent market trends, we will not look closely at how the Covid epidemic, and measures taken in response, affected Scotland’s property market (a topic covered in previous news releases). Suffice to say that 2021 – the brown line – was not a typical year, with the early months characterised by a peak in sales and subsequent slump associated with a LBTT tax-holiday being discontinued from the end of Q1.
Sales returned slowly to relatively high levels as the mantra for “the race for space” and “working from home” took hold. Taken as a whole, 2021 proved to be something of a high-water mark for the market, with the year recording the highest number of sales averaging about 9,500 transactions per month.
Although 2022 – the pink line – started well with an average 8,400 sales per month to the end of August, Liz Truss came into power on 6 September 2022, with her mini-budget raising the interest rate to 2.25%, on 22 September 2022. Ms Truss departed as Prime Minister on 25 October 2022. The bank rate was further increased on 3 November and 15 December 2022, ending the year at 3.5%. The graph shows the decline in monthly transactions over the period from October to December 2022.
Figure 2. The number of sales per month recorded by RoS based on entry date from 2021 – 2023
Finally, the black line charts 2023. This year started with the lowest volume of January sales of the last nine years, at 5,871 transactions. Although sales have picked up since then, total sales for the first seven months of the year – at nearly 52,000 – are about 10% lower than 2022 and (other than the Covid year 2020) the lowest since 2013. The Bank rate is one of the prime reasons for the slowing in sales, having reached 5.25% at the time of writing – its highest level of the last 15 years.
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 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 66 such transactions recorded by RoS relating to July 2023. Currently, this is the thirdhighest July total recorded to date, and although we can expect RoS will process further high-value properties for the month, it looks set to remain comfortably below corresponding levels in 2021 and 2022.
Looking at the number of high-value properties sold in the first seven months of each year in Table 3, 2022 is ranked first with 642 high-value sales, followed by 2021 – when sales were boosted prior to the ending of the Covid related LBTT tax-holiday in April of that year – with 591. 2023 is ranked in third place.
However, there is a clear trend, in that the totals in each of the first seven months of 2023 are lower than a year earlier. In aggregate, these declines are larger than the downturn in the market as a whole, indicating that last year’s enthusiasm for the purchase of high-value homes has dissipated at least for the time being.
Edinburgh accounts for 246 of the 504 high-value sales (49%) that have been recorded to date by RoS in 2023. This compares to 50% in 2022 and is consistent with the gently declining importance of Edinburgh sales based on this metric, from its peak of nearer 60% a few years back. Glasgow and East Lothian continue to vie for second place, with cumulative sales of 32 and 30 high-value homes respectively so far this year. Several other local authorities – Fife, East Renfrewshire, Perth and Kinross, and Stirling – account for a further 20+ sales apiece, but these six local authorities combined account for just over 30% of this top-end market.
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending July 2023. As reported above, 15 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year.
How Scotland Compares
Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-July 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–July 2023
Scotland’s Eight Cities
Figure 5. Average house prices for Scotland’s eight cities from May 2022–July 2023
Figure 6. Average house prices for Scotland’s eight cities July 2023
February House Price Index from Walker Fraser Steele
January’s downturn in prices continues into February
Prices in 2023 experience the largest fall in fourteen years
East Renfrewshire is authority with highest average prices
Sales volumes are low in Jan & Feb – expect higher sales in March
Average Scottish House price now £220,702, down 0.9% on January, up 3% annually
Table 1. Average House Prices in Scotland for the period February 2022 – February 2023
(The prices are end-month smoothed over a 3 month period)
Note: The Walker Fraser Steele Acadata House Price Index (Scotland) provides the “average of all prices paid for houses”, including those made with cash.
Scott Jack, Regional Development Director at Walker Fraser Steele, comments:“Far from experiencing a storm, the Scottish housing market could be said to be navigating choppy waters.
“This is to be expected as January and February are typically slow months for house sales – in part because of the shorter days and extended holidays over the Christmas period. However, the seasonal lull in activity has been amplified by the rise in mortgage costs as a result of the ill-conceived Truss-Kwarteng mini budget.
“Amazingly, notwithstanding that onslaught, the current average house price still remains some £6,300, or 3.0%, above the average price of twelve months earlier. However, through a monthly lens, our index shows that in February 2023 prices continued their descent, falling by a further £2,000 in the month, on top of the £1,750 price decrease in January.
“If we take account of both the change in prices and the number of transactions involved – Edinburgh (17%); Aberdeenshire (9%); South Lanarkshire (9%); North Lanarkshire (7%); East Renfrewshire (6%); and Clackmannanshire (6%) in February accounted for 54% of the £6,300 increase in Scotland’s average house price over the year.
“Of note in Scotland is that many estate agents have noticed an increase in the number of rental properties coming to market. Landlords raised their concerns about the legislation in response to the cost-of-living crisis some time ago. This legislation has followed a sustained period of increased letting agent regulation, higher taxes for landlords and tight rent controls to protect tenants.
“As we emerge from February, we will watch transaction volumes carefully. In each of the last eight years, March transaction totals have always exceeded those of February. We should expect higher sales volumes in next month’s data.”
Commentary: John Tindale, Acadata Senior Housing Analyst
The February housing market
February 2023 continued the downward trend in average prices seen in January, with prices falling by a further £2,000 in the month, on top of the £1,750 price decrease in January. Prices in 2023 to the end of February have therefore dropped by £3,750. Ignoring the price movements associated with the introduction of the LBTT tax in April 2015 and the termination of the LBTT tax-holiday in April 2021, these price reductions represent the largest falls over two months since February/March 2009, some fourteen years ago.
During February 2023, it was the price of flats that again fell the most, down by -1.8% in the month.
So why the price falls? As discussed last month, January and February are typically the weakest months of the year in Scotland’s housing market in terms of transaction levels, which is in part to do with Christmas, when many estate agents remain closed over the holiday period.
When sales levels are low, minor trends – which might otherwise have been obscured by the larger number of sales in the other months of the year – can stand out. For example, estate agents have been reporting that the number of sales of properties which have previously been in the rental market are becoming more noticeable, with the government rent cap and future regulation changes deterring investors in this sector.
Even a small exodus of private investors in buy-to-let properties will have an impact on prices in the winter months. In Edinburgh, for example, the price of an average flat fell from £286k in December 2022 to £275k in February 2023, while in Glasgow average flat prices fell from £180k to £169k over the same period – with these two cities accounting for 38% of Scotland’s flat sales in February.
Despite reporting the largest monthly fall in prices of the last fourteen years, the current average house price still remains some £6,300, or 3.0%, above the average price of twelve months earlier.
Indeed, as can be seen from Figure 1 below, taking a view of price movements in Scotland over the last five years, the dip in prices in January and February 2023 is barely perceptible. The average house price in February 2018 was £178,175 compared to £220,702 in February 2023 – a £42,500, or 24% rise over the period – about which the adage that past performance is no guarantee of future performance is pertinent.
Figure 1. The average house price in Scotland over the five year period February 2018 to February 2023
Local Authority Analysis
Table 2. Average House Prices in Scotland, by local authority area, comparing February 2022, January 2023 and February 202
Table 2 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for February 2022, as well as for January and February 2023, calculated on a seasonal- and mix-adjusted basis. The ranking in Table 2 is based on the local authority area’s average house price for February 2023. Local Authority areas shaded in blue experienced record average house prices in February 2023.
Annual change
The average house price in Scotland in February 2023 has increased by some £6,300 – or 3.0% – over the last twelve months. This annual rate of growth has decreased by -1.6% from January’s 4.6%, which is a slightly smaller fall than the -1.9% reduction seen in January.
However, in February 2023, 23 of the 32 local authority areas in Scotland were still seeing their average prices rise above the levels of twelve months earlier, three fewer than in January. The nine areas where values fell over the year were, in descending order (with newcomers this month marked by an asterisk):- Inverclyde* (-8.7%), Orkney Islands* (-3.0%); Fife (-2.9%), Aberdeen City (-2.1%), Na hEileanan Siar (-2.0%), Glasgow City* (-1.2%), Angus* (-1.2%), Scottish Borders (-0.4%) and Dundee City (-0.2%).
The area with the highest annual increase in average house prices in both January and February 2023 was Clackmannanshire, up by 25.0% and 29.3% respectively over the two months. However, there were only 27 transactions in Clackmannanshire in February 2023, with a small number of transactions frequently being associated with volatile movements in average prices.
On a weight-adjusted basis – which incorporates both the change in prices and the number of transactions involved – there were six local authority areas in February which accounted for 54% of the £6,300 increase in Scotland’s average house price over the year. The six areas in descending order of influence are: – Edinburgh (17%); Aberdeenshire (9%); South Lanarkshire (9%); North Lanarkshire (7%); East Renfrewshire (6%); and Clackmannanshire (6%).
Monthly change
In February 2023, Scotland’s average house price fell in the month by some -£2,000, or -0.9%. This is the largest fall in a single month since March 2009, some fourteen years ago, ignoring the rather artificial falls around the months relating to the introduction of the LBTT in April 2015, as well as the ending of the LBTT tax-holidays in April 2021.
In February 2023, Scotland’s average house price fell in the month by some -£2,000, or -0.9%. This is the largest fall in a single month since March 2009, some fourteen years ago, ignoring the rather artificial falls around the months relating to the introduction of the LBTT in April 2015, as well as the ending of the LBTT tax-holidays in April 2021.
On a weight-adjusted basis, there were four local authority areas in February which accounted for 51% of the -£2,000 decrease in Scotland’s average house price in the month. The four areas in descending order of influence are: – Glasgow (-18%); Edinburgh (-16%); Fife (-9%); and East Lothian (-8%). It is not surprising to find Glasgow and Edinburgh in this listing, given the fall in flat prices, as they are the two authorities with the highest percentage of flats being sold each month, at 67% and 63% of their respective transaction totals.
On a similar theme, Fife has the highest proportion of terraced sales of all the 32 local authorities in Scotland, at 27% – terraced properties also being popular among buy-to-let investors, who may have decided it is time to sell.
The highest increase in average prices in the month was in East Renfrewshire, where – with two detached properties selling for £1 million plus in Newton Mearns, one being a new-build on the Southfield Grange Development – the average price of detached properties in the area rose by £22k in the month.
Overall, in February, the average price in East Renfrewshire increased by 7.7%, causing Edinburgh with its downward movement in prices, to fall into second place in terms of having the highest-valued average house price in Scotland.
Peak Prices
Each month, in Table 2 above, the local authority areas which have reached a new record in their average house prices are highlighted in light blue. In February, there are 5 such authorities, up by one from 4 in January.
Scotland transactions of £750k or higher
Table 3. The number of transactions by month in Scotland greater than or equal to £750k, January 2015 – February 2023
Table 3 shows the number of transactions per month in Scotland which are equal to or greater than £750k. The threshold of £750k has been selected as it is the breakpoint at which the highest rate of LBTT becomes payable.
There were 37 such transactions recorded by RoS relating to February 2023. Currently, this is the fourth-highest February total recorded to date, but there is likely to be an increase to this figure next month, as RoS process additional sales.
According to the RoS data, the highest priced property sold in Scotland in February 2023 was a £1.6 million terraced property in Edinburgh. This contrasts with three properties sold in January at £3 million plus. Although the number of such sales is small, especially in the winter months, it is perhaps an early indication of a slight slowing in sales at the top-end of the market.
Transactions analysis
Figure 2 below shows the monthly transaction count for purchases during the period from January 2015 to January 2023, based on RoS (Registers of Scotland) figures for the Date of Entry.
The chart shows how transactions tend to dip in February from the January totals, which in turn are lower than the totals for the year’s preceding December. In six of the eight years displayed, the February sales total is the lowest of the year. The two occasions when this was not the case was in February 2020 and February 2021.
In February 2020 the Covid pandemic had yet to be identified, with the first lockdown beginning on 23rd March 2020, Phase 1 being introduced on 29th March 2020 and Phase 2 introduced on 19th June 2020. This resulted in an almost total lack of sales in April 2020 – a position clearly visible on the graph.
In 2021 the end of the LBTT tax-holiday was planned, and indeed, did end on 31st March. Consequently, sales of properties were higher than average in the final two months of the scheme – the brown line showing a peak in sales in March 2021. Sales did however slump in April 2021, as the tax-holiday came to an end. April was therefore the month with the lowest level of sales in 2021.
A close study of the eight years displayed in Figure 2 also reveals that each December is followed by a reduction in transactions in the following January, without exception.
Figure 2. The number of sales per month recorded by RoS based on entry date from 2015 – 2023
What we can also learn from Figure 2 is that one of the three months of June, July and August have seen the highest sales of the year in 4 of the 8 years displayed. Finally, in each of the eight years, March transaction totals have always exceeded those of February. One can therefore look forward to higher sales volumes with next month’s data
Heat Map
The heat map below shows the rate of house price growth for the 12 months ending February 2023. As reported above, 23 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year, the nine exceptions being :- Inverclyde, Orkney Islands, Fife, Aberdeen City, Na h-Eileanan Siar, Glasgow City, Angus, Scottish Borders and Dundee City.
The highest increase on the mainland over the twelve months to February 2023 was in Clackmannanshire at 29.3%, although this was based on a relatively small number of sales. In second place on the mainland was Moray at 14.3%. 4 of the 32 local authority areas had price growth of 10.0% or higher – one fewer than in January 2023.
Comparisons with Scotland
Figure 3. Scotland house prices, compared with England and Wales, North East and North West for the period January 2005-February 2023
Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, North East and North West for the period January 2020–February 2023
Scotland’s Eight Cities
Figure 5. Average house prices for Scotland’s eight cities from December 2021–February 2023
Figure 6. Average house prices for Scotland’s eight cities February 2023
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.
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
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.
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 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
