Property prices in Scotland increased by 7.7% in the 12 months to March 2018, soaring ahead of growth in the rest of the UK, the latest index data shows.
The growth in values is being led by Falkirk and Edinburgh where property prices have now increased by 15.4% and 14.5% year on year, according to the index from Your Move. This takes the average price of a home to £184,850, a rise of £13,000 over 12 months.
The Scottish figures outpaces England where annually prices increased by just 1%. Even in Wales, where there was a rush to buy before the new Land Transaction Tax was introduced in April, annual growth in March was 4.8%.
The index report says that the contrast in fortunes of the Scottish and English housing markets is starkest in the respective capitals. While average prices in London are down 2.5% in the 12 months to the end of March, they are up 14.5% in Edinburgh.
Indeed, Edinburgh accounted for 45% of the £2,147 increase in Scotland’s average house price in March, on a weight adjusted basis. In part, the strong performance in Edinburgh is down to strong sales of high value properties. The number of transactions for £750,000 or over in the city in the first three months of the year at 62 was more than double last year’s 24.
But the report explains that this is hardly a complete explanation for the strength of the Scottish market, which is broad based. Overall, 26 out of 32 local authorities in the country recorded growth in the last year with 10 setting new peak average prices in March.
They include several that, like Edinburgh, show double digit growth for the last year. Falkirk, which leads the way with annual price growth of 15.4%, bolstered by rising prices of detached properties and new builds sold off plan.
East Renfrewshire, the most expensive area outside Edinburgh, saw prices increase year on year by 13.4%, followed by West Lothian up 12.4%, the Scottish Borders up 12%, Fife up 11.6%, Galloway up 10.6%, Renfrewshire and Glasgow both up 10.5% and Midlothian up 10.4%.
The index report suggests that the strength in the market is a combination of factors that include low interest rates and strong competition among mortgage providers, high employment rates and average weekly earnings that are the third highest of the 12 regions in the UK along with house prices that are still the second lowest in the UK.
‘The Scottish market goes from strength to strength, with Edinburgh driving growth, but excellent performance found across the country. With property in Scotland still very affordable, it is possible this will continue,’ said Christine Campbell, Your Move managing director in Scotland.
According to Alan Penman, business development manager for Walker Fraser Steele, one of Scotland’s oldest firms of chartered surveyors and part of the LSL group of companies, said the property market reflects a strong economy.
‘We shouldn’t be blind to the fact that price increases reflect not just strong demand, but also a pronounced lack of supply in housing,’ he warned.