LSL: Scotland house prices surge

Sarah Davidson

August 13, 2014

Property prices rose £8,890 yearly, the highest annual growth rate recorded in Scotland for four years.

On a seasonally adjusted basis Scotland’s house prices increased by 1.1% in June, amounting to £1,800 – the second highest monthly rise since July 2007.

The house price surge is primarily centred around Edinburgh and Glasgow, where property prices increase by 4.2% and 4.5% monthly.

Such was the demand, 25% of Scotland’s housing transactions took place in the two cities in June.

Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, said: “On the home straight to polling day, the Scottish housing market is fighting fit ahead of the independence battle.

“While the majority of regions across England and Wales are witnessing price falls, the Scottish market is moving the other way.

“Many households are feeling the weight lift off their shoulders, as consumer confidence in the economic recovery mounts.

“Overall, average house prices in Scotland are now only 0.9% below their May 2008 peak, and this gap is narrowing. “

Scotland’s price growth eclipsed the North of England, the Midlands and also Wales, however it was lower than East Anglia (5.9%), the South West (6.5%), the South East (8.4%) and Greater London (19.0%).

First-time buyers played a significant role, as sales of flats increased by 28% in the first half of 2014 compared to the first six months of 2013.

Sexton added: “However, now that the Help to Buy scheme has suspended its funding, it remains to be seen whether the activity emanating from the bottom rungs of the property ladder will be dampened.

“The Scottish housing market may appear sturdy, but there are many changes on the horizon to weather.”

In Aberdeenshire prices climbed to a new high of £228,802 last month, as the price of detached homes rose from £260,000 to £275,000 over the last year.

Dr Peter Williams, housing market specialist and Chairman of Acadata, felt the Glasgow and Edinburgh results were most interesting.

He said: “So why did prices rise in both cities in June? The statistics show that there were substantial increases in the number of properties changing hands.

“Compared to May, 130 more flats were sold in Edinburgh in June and in Glasgow 60 more flats and 30 more terraces.

“In both cities, this increase in demand raised the average prices paid for flats, by £20,000 in Edinburgh and by £15,000 in Glasgow.”

After experiencing a dip in May 2014, Williams said Scotland has now got to grips with the Mortgage Market Review.

He added: “Last month, we stated that the new MMR rules introduced at the end of April had slowed down the number of mortgage approvals being granted in May.”

“It would appear that the problems involved in processing new mortgage applications under the MMR rules were resolved during May, with the housing market recovering rapidly since then. “

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