Scotland’s house prices unchanged over last twelve months

Walker Fraser Steele November House Price Index

No change in Scotland’s house price over last twelve months

· East Renfrewshire prices rise by 12.0%

· Dumfries and Galloway prices fall by -5.4%

· Transactions down by 12.3% on 2022 levels

Scott Jack, Regional Development Director at Walker Fraser Steele, comments: “At a national level, the picture this month shows Scotland’s average house price in November 2023 barely changed over the last year. However, it also reveals some significant regional differences in average house prices over the same period.

“This is remarkable when you consider the affordability pressures experienced by the housing market since the autumn of ’22. The average house price now is just -£16 lower than twelve months earlier and stands at £222,637.

“The reality is that regional hotspots like East Renfrewshire which enjoyed price gains of 12% during the period have been offset by dips elsewhere, such as Dumfries and Galloway which has endured a fall of -5.4%.

“We have also seen variance in property types. Over the last year, the average price of detached properties has increased by +1.2%, and flats by +0.5%, while semi-detached and terraced properties have fallen by -1.8% and -0.9% respectively.

“With underlying trends such as mortgage affordability improving now, more buyers will re-enter the market providing competition for the cash purchasers, who currently represent 36% of all sales in Scotland, which will further boost confidence.”

House Price	Index	Monthly Change %	Annual Change %
£222,637	291.6	-0.3	0.0

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

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

Month	Year	House Price	Index	Monthly Change %	Annual Change %
November	2022	£222,653	291.6	0.1	6.7
December	2022	£222,399	291.3	-0.1	6.5
January	2023	£221,162	289.7	-0.6	4.5
February	2023	£219,827	287.9	-0.6	2.9
March	2023	£219,531	287.5	-0.1	1.3
April	2023	£221,173	289.7	0.7	1.5
May	2023	£223,391	292.6	1.0	1.6
June	2023	£223,831	293.2	0.2	1.4
July	2023	£223,308	292.5	-0.2	0.5
August	2023	£223,079	292.2	-0.1	0.4
September	2023	£223,803	293.1	0.3	0.7
October	2023	£223,403	292.6	-0.2	0.5
November	2023	£222,637	291.6	-0.3	0.0

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

Commentary: John Tindale, Acadata Senior Housing Analyst

November’s housing market

Scotland’s average house price in November 2023 has barely changed over the last year, being just £16 lower than twelve months earlier, and now stands at £222,637. Looking at Table 1 above, it can be seen that for eight of the last twelve months, the average house price has been in a range between £222,400 and £223,830, with the peak occurring in June 2023.

However, referring to Table 2 (on page 4 of this report), there is only one local authority area where the annual rate of change in house prices is zero, which is Glasgow City.

All 31 other areas in Scotland will therefore have been seeing some movement in their average house prices over the previous twelve months. Excluding annual price changes in the range of ±1% only removes a further 4 authorities, leaving 27 authorities that have annual price movements in excess of ±1%.

Indeed, an annual rate of ±3.6% would need to be reached before excluding half of the 32 areas in Scotland. It would therefore be wrong to conclude that all of Scotland’s local housing markets have been static over the last twelve months – rather, the more correct conclusion is that “it just so happens” that when you add all the movements in house prices in Scotland together, they sum to minus £16.

A similar picture emerges when looking at property types – over the last year, the average price of detached properties has increased by +1.2%, and flats by +0.5%, while semi-detached and terraced properties have fallen by -1.8% and -0.9% respectively.

Again, the sum of these changes will amount to (minus) £16 – but that is by chance. There are however underlying trends, such as the level of interest rates (discussed later) and the increase in household living costs which will affect all properties, but even then, these factors don’t necessarily apply to all.

Cash purchasers, for example – who currently represent 36% of all sales in Scotland – may be less influenced by high interest rates, compared to having to take out a loan to purchase a property.

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

Figure 1 shows how average house prices in Scotland have changed since the start of the Covid pandemic in March 2020.

It can be seen that the average price has barely moved over the twelve months from November 2022 to November 2023, although values have risen by £39,640 from March 2020. This increase of 21.7% over the period compares to a figure of 19.7% in the CPIH Index – so in real terms (after allowing for consumer price inflation) the average house price in Scotland since the start of the pandemic has risen by 2.0%.

Local Authority Analysis

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

Table 2 shows average house prices, calculated on a seasonal- and mix-adjusted basis, by Local Authority Area, for November 2022 and October and November 2023, together with the corresponding percentage price changes over the last month and year.

The ranking figures are based on average house prices in November 2022 and 2023. Line items are shaded in blue in cases where average house prices in the Local Authority Area have experienced record highs in November 2023.

Annual change

The average house price in Scotland in November 2023 has fallen by a minimal £16, or 0.0%, over the last twelve months, which is 0.5% lower than the rate seen in October, one month earlier. This is the lowest annual growth rate since May 2016, some seven and a half years earlier.

14 of the 32 local authorities in Scotland were reporting a positive movement in prices over the previous twelve months, compared with 17 in October. However, as with the previous month, Edinburgh had the largest fall in prices over the year when measured on a weight-adjusted basis (which takes into account both the number of sales and the nominal fall in its average price of -£7,660), which on its own counterbalanced some 27% of the positive movement in values in the 14 areas with price gains.

In November, on the mainland, East Renfrewshire had the highest increase in its annual rate of price growth, at 12.0%, which enabled the authority to remain in top position in Table 2 for the third month running.

In fact, East Renfrewshire has occupied first place in Table 2 – indicating it has had the highest average property values – for six of the last twelve months, trumping the City of Edinburgh which has only been in first place for four months over this period. In East Renfrewshire, all property types have seen an increase in values over the last twelve months, but particularly semi-detached homes, with average prices rising from £300k in November 2022 to £350k twelve months later.

Staying on the mainland, Midlothian has the second-highest annual growth rate at 10.7%. Again, similar to East Renfrewshire, all property types have seen an increase in their average prices, but in Midlothian it is terraced properties that have had the most significant increase, up from an average £205k in November 2022 to £235k one year later.

At the other end of the scale, the area on the mainland with the largest percentage fall in prices over the last twelve months was Dumfries and Galloway, at -5.4%. In Dumfries and Galloway, all property types saw prices fall over the year, with the largest fall on a weight-adjusted basis being terraced homes, down from an average £140k in November 2022 to £125k one year later.

Monthly change

In November 2023, Scotland’s average house price fell by some -£750, or -0.3%, which contrasts with the revised -£400, or -0.2%, change in prices seen in October. This is the seventh monthly fall of 2023: however, as discussed above, it would appear that prices have been gently oscillating over the last eight months, with the average price ranging between £221,000 and £224,000.

In November 2023, 12 of the 32 Local Authority areas in Scotland experienced rising prices in the month, the same number as in October. The area with the highest increase in its average price in the month was Inverclyde, up by 6.0%, although it still remains the authority with the lowest-priced housing in Scotland. The increase in the area’s price in the month was assisted by the sale of a modern 2-bedroom apartment, in Cloch Road, Gourock, overlooking the Clyde estuary, for £350k.

By way of contrast, the area on the mainland with the largest monthly fall in its average price was Fife, down by -3.6%. All property types in Fife saw a fall in their average prices over the month, with the most significant fall in prices being semi-detached homes, down from £207k in October 2023 to £192k in November.

For interest, the highest-priced home to have been sold in Scotland in November was a £2.9 million five-bedroom detached home in Dirleton, North Berwick, East Lothian, overlooking The Renaissance Golf Club course and the Firth of Forth. Golf is a recurrent theme in the sale of high value homes.

Transactions analysis

Figure 2 below shows the monthly transaction count for purchases during the period from January 2019 to November 2023, based on Registers of Scotland (RoS) figures for the Date of Entry (except for November 2023, which is based on RoS Application Dates).

The first year on the Chart, 2019 (light blue line), was relatively “normal” having an average 8,560 sales per month, some 2.1% higher than the total for 2018, but -0.3% lower than 2017.

As can be seen, 2020 (the turquoise line) was more varied, the Covid pandemic having manifested itself in March 2020, with the first lockdown taking place in April 2020, when the market slumped to just 2,637 sales.

There was then a slow path to recovery during the remainder of 2020 with a peak in transactions in October 2020 of 13,045 sales, as the benefit of the LBTT tax holiday and the mantras of the “race for space” and “work from home” came to the fore.

There was a second peak in transactions in March 2021 (the brown line), as purchasers scrambled to take advantage of the tax holiday, before its cessation on April 1st 2021.

In 2022 (the red line), house purchases returned to near normality, with the first nine months of 2022 seeing an average 8,600 sales per month. However, Liz Truss came into power on 6 September 2022, with her mini-budget, which resulted in the bank base rate being raised to 2.25%. The bank rate was further increased on 3rd November and 15th December 2022, ending the year at 3.5%.

Figure 2.The number of sales per month recorded by RoS based on entry date from 2019 – 2023

A graph of a number of registrations

Description automatically generated

This brings us to the current year of 2023 (the black line) – the relatively high bank rate of 3.5% had an adverse effect on property transactions, with only 5,893 sales for January 2023 – the lowest January total since 2013. Although the housing market in 2023 did enjoy the spring bounce in transactions that occurs traditionally in March, the bank base rate was increased a further five times in 2023, reaching 5.25% on 3rd August 2023 (the current rate). Over the first eleven months of 2023, sales are down by 12.3% compared to the equivalent period in 2022.

Scotland transactions of £750k or higher

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

Sales of £750k+
Month	2015	2016	2017	2018	2019	2020	2021	2022	2023
1	33	27	19	35	44	49	65	88	75
2	42	20	15	52	26	33	62	69	53
3	231	57	25	34	35	30	115	80	76
4	2	27	29	24	36	11	46	70	68
5	14	20	31	32	54	16	63	90	69
6	26	47	43	41	60	36	119	112	102
7	15	36	55	44	61	41	121	136	106
8	41	54	62	60	61	40	102	126	105
9	46	44	56	70	59	67	127	135

…

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

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

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

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

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

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

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

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

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

Commentary: John Tindale, Acadata Senior Housing Analyst

The January housing market

In January 2023, average house prices in Scotland fell by -£1,921, or -0.9%. Ignoring the price movements associated with the introduction of the LBTT tax in April 2015 and the termination of the LBTT tax holiday in April 2021, this is the largest fall in a single month since December 2012. During January it was the price of flats that fell the most, by -2.0%, followed by terraces, down by -1.6%, and semi-detached properties down by -0.6%. Meanwhile, the average price of detached homes remained steady during the month, with 0.0% price change.

So why the price fall? January and February are typically the weakest months of the year in Scotland’s housing market. Transaction levels are at their lowest in these two months, which is in part to do with Christmas, when many estate agents remain closed over the holiday period, and in part due to the lack of daylight hours and inclement weather associated with these two winter months. When sales levels are low, minor trends – which might otherwise have been obscured by the larger number of sales in the other months of the year – can stand out. For example, estate agents have been reporting that the number of sales of properties which have previously been in the rental market is becoming more noticeable, with the government rent cap and future regulation changes deterring investors in this sector.

Even a small exodus of private investors in buy-to-let properties will have an impact on prices in the winter months. In Edinburgh, for example, the price of an average flat fell from £286k in December 2022 to £274k in January 2023, while in Glasgow average flat prices fell from £180k to £175k over the same period – with these two cities accounting for 42% of Scotland’s flat sales in January.

Despite reporting the largest monthly fall in prices of the last ten years, the current average house price still remains some £9,700, or 4.6%, above the average price of twelve months earlier. Indeed, as can be seen from Figure 1 below, taking a view of price movements in Scotland over the last five years, the dip in prices in January 2023 is barely perceptible. The average house price in January 2018 was £174,637 compared to £222,668 in January 2023 – a £48,000, or 27.5% rise over the period. This increase in price equates to a compound interest rate of 5.0% over the five years – which is a reasonable rate of return, given that the official bank rate over this period was mostly lower than 0.75%.

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

Local Authority Analysis

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

Table 2 above shows the average house price and percentage change (over the last month and year) by Local Authority Area for January 2022, as well as for December 2022 and January 2023, calculated on a seasonal- and mix-adjusted basis. The ranking in Table 2 is based on the local authority area’s average house price for January 2023. Local Authority areas shaded in blue experienced record average house prices in January 2023.

Annual change

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

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

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

On a weight-adjusted basis – which incorporates both the change in prices and the number of transactions involved – there were six local authority areas in January which accounted for 51% of the £9,700 increase in Scotland’s average house price over the year. The six areas in descending order of influence are: – Edinburgh (23%); North Lanarkshire (7%); Glasgow (6%); Aberdeenshire (5%); East Renfrewshire (5%); and South Lanarkshire (5%).

Monthly change

In January 2023, Scotland’s average house price fell in the month by some -£1,900, or -0.9%. This is the largest fall in a single month since December 2012, some ten years ago, ignoring the rather artificial falls around the months relating to the introduction of the LBTT in April 2015, as well as the ending of the LBTT tax-holidays in April 2021.

In January 2023, 23 of the 32 Local Authority areas in Scotland experienced falling prices in the month, which is eight more than in December2022. Of the 23 local authorities with price falls, 11 out of the top 11 areas when ranked by price all had price falls. Overall, it was the price of flats that saw the largest falls in the month, down by -2.0%, followed by terraces, down by -1.6%, with semi-detached properties down by -0.6%, while the average price of detached properties remained constant, with 0.0% change.

On a weight-adjusted basis, there were four local authority areas in January which accounted for 53% of the -£1,900 decrease in Scotland’s average house price in the month. The four areas in descending order of influence are: – Fife (-16%); Glasgow (-15%); Edinburgh (-15%) and Falkirk (-7%). It is not surprising to find Glasgow and Edinburgh in this listing, given the fall in flat prices, as they are the two authorities with the highest percentage of flats being sold each month, at 67% and 63% of their respective transaction totals. On a similar theme, Fife has the highest proportion of terraced sales of all the 32 local authorities in Scotland at 27% – terraced properties also being popular among buy-to-let investors, who may have decided it is time to sell.

Peak Prices

Each month, in Table 2 above, the local authority areas which have reached a new record in their average house prices are highlighted in light blue. In January, there are 4 such authorities, down from 6 in December.

Scotland transactions of £750k or higher

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

Table 3 shows the number of transactions per month in Scotland which are equal to or greater than £750k. The threshold of £750k has been selected as it is the breakpoint at which the highest rate of LBTT becomes payable.

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

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

Transactions analysis

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

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

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

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

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

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

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

In 2022, transaction levels have averaged 8,358 sales per month, which is down 2.4% on the 8,561 average sales that took place in 2019 – the last full year prior to Covid.

Heat Map

The heat map below shows the rate of house price growth for the 12 months ending January 2023. As reported above, 26 of the 32 local authority areas in Scotland have seen a rise in their average property values over the last year, the six exceptions being Na h-Eileanan Siar, Aberdeen City, Stirling, the Scottish Borders, Dundee City and Fife. The highest increase on the mainland over the twelve months to January 2023 was in Clackmannanshire at 25.0%, although this was based on a relatively small number of sales. In second place on the mainland was Moray at 11.4%. 5 of the 32 local authority areas had price growth of 10.0% or higher – one fewer than in December 2022.

Comparisons with Scotland

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

Figure 4. A comparison of the annual change in house prices in Scotland, England and Wales, North East and North West for the period January 2020–January 2023

Scotland’s Eight Cities

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

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

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