"The strength of the market in Scotland is impressive and, with property still relatively affordable and the economy still growing, it could have some way yet to run."
Scottish house prices saw monthly growth of 1.4% in September, boosting annual performance in the country to 5.6% - more than triple the growth rate of England and Wales as a whole which grew by 1.7%, according to the latest Your Move data.
This is also significantly higher than any other region in the UK, with the North West closest at 4.6%.
The average house in Scotland is now worth £177,960, up £9,383 on a year ago. The increase means prices in the country are growing at their fastest rate in almost three years, excluding the spike ahead of the introduction of the LBTT in April 2015.
On the demand side, though interest rates rose in November, the country continues to benefit from historically low interest rates. The economy also remains fairly strong: unemployment is at a 42-year low; the economy is still expanding, albeit at a slowing rate; and the Scottish Government has a number of schemes to help buyers.
Scotland’s median full-time earnings are also the third highest in the UK, after Greater London and the South East, while Scotland’s median house prices are the lowest in Great Britain at £135,000.
The result is that the country has Britain’s most affordable property. At the same time, the one challenge the market does share with the rest of the UK, is a lack of supply: the RICS Residential Market Survey for September 2017 shows Scotland with the second lowest number of new vendor instructions in the UK. Coupled with strong demand, that’s pushing up prices across the country.
Prices in Stirling rose 17.4% annually, setting a new peak average price in the month. Prices in the Scottish borders rose 11%, also setting a new peak, and Clackmannanshire prices are up 10.1%.
The market’s also supported by the strength of its biggest cities, which account for the lion’s share of transactions. Both Edinburgh, where prices are up 8.8% annually to £265,846 (the highest in Scotland), and Glasgow, up 6.3%, show solid growth. The latter was also another to set a new peak in September – for the fourth time this year – with prices up 1.8% over the month to £154,522.
Christine Campbell, Your Move managing director in Scotland, said: “The strength of the market in Scotland is impressive and, with property still relatively affordable and the economy still growing, it could have some way yet to run.”
Alan Penman, BDM for chartered surveyor Walker Fraser Steele, part of the LSL group of companies, added: “We’re seeing strength right across Scotland at the moment, but crucially, it’s supported by the big cities. While London is a significant dampener on price growth in England and Wales, Edinburgh and Glasgow continue to show solid performance with above average growth.”