Scotland has to some extent bucked the trend, given that the average house price in the UK at the beginning of this month revealed the biggest drop in UK annual house prices since 2009. The Walker Fraser Steele index reveals a strong demand for semi-detached properties in Scotland, creating a price bounce.
The highest average price increase with Edinburgh the only high-value area experiencing a price decrease in April. Scotland’s housing market continues to surprise with strong demand for higher value homes leading average prices to rise by £1,600, or 0.7% in April. It’s the largest increase since May of last year with the result that Scotland’s average house price now stands at £221,267 – £3,300, or 1.5%, higher than twelve months earlier.
The impact, with the exception of Edinburgh, is that ten of the top eleven areas ranked by average house price saw prices rise, with six of these areas establishing new record average prices. Nearly all property types have performed well but, of particular note, is the fact that in half of these ten areas, it is semi-detached homes that have seen the largest rise in value.
The choppy waters facing the UK housing market more generally mean Scotland also must brace for further interest rate rises and consequent pressures on affordability. However, given these pressures, the market on this evidence remains remarkably resilient. What our analysis does show is that concerns about negative equity, while the labour market remains stretched, are misplaced. People continue to buy and the lack of the right kind of housing means prices are being sustained by a lack of supply that has more impact on prices than the current affordability challenges.
