Property prices in Scotland down slightly before Brexit but up overall

Ryan Fowler

August 24, 2016

Residential property prices in Scotland increased by 4% year-on-year in June but fell by 0.4% month-on-month, according to the latest data from Your Move.

Overall prices flattened slightly in the run up to the European Union referendum with the first monthly decline since February but it was still the largest annual growth rate since May 2015.

While monthly house prices were down compared to May, the average price of property was £170,404 in June, still 0.97% higher compared to the start of the year.

Concerns about productivity

A breakdown of the figures shows that a number of areas did not see prices fall in June, most notable Aberdeen where a fall in oil prices have hit the city hard in recent months, but it saw prices rise by 1.6% month on month.

Prices increased month on month by 3.8% in Glasgow, by 2.8% in East Dunbartonshire, by 2.5% in Stirling, by 2% in Shetland, by 1% in Moray, by 1.3% in South Lanarkshire, by 1.2% in North Lanarkshire, by 0.5% in Argyll and Bute, by 0.4% in West Dunbartonshire, by 0.2% in Renfrewshire, the Borders and East Ayrshire, by 0.1% in South Ayrshire and North Ayrshire and were unchanged in Edinburgh.

Prices fell by 6.4% in Inverclyde, by 5.9% in Fife, by 5% in Perth and Kinross, by 3.9% in East Lothian, by 3.5% in Dumfries and Galloway, by 3.3% in Orkney, by 3% in West Lothian, by 2.4% in Dundee, by 2.4% in Clackmannanshire, by 2.3% in East Renfrewshire, by 1.8% in Midlothian, by 1.3% in Aberdeenshire and by 0.1% in Falkirk.

Christine Campbell, Your Move managing director in Scotland, pointed out that the data covers the period up to the end of June, so any impact from Brexit is not yet reflected in the figures.

She said: “What we can see is that the underlying fundamentals of the market remain strong. We’re benefitting from record low mortgage rates, high employment levels, and high demand for property. Following April’s introduction of the 3% tax increase on second homes, house prices and transaction figures remain arguably skewed in the second quarter of this year, as buyers pushed to complete before the surcharge came into effect.”

She also explained that June was the first month that the spike in house prices as a result of the 2015 LBTT changes dropped out of the annual figures.

She added: “This previous distortion in property prices goes some way to explaining the seemingly significant annual price increase we saw this June.

“Whilst market sentiment remains strong, with continued demand from both buyers and sellers, it will be interesting to watch how potential Brexit implications play into transaction and price figures over the coming months,’ she added.

“Long-term, the outlook for the housing market looks favourable. However, with housing demand continuing to vastly outstrip supply, it is important that we see a concerted focus on building new property to ensure there are enough homes for potential buyers across the country.”

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  • The article raises some interesting points but it is important not to see house prices as the only metric by which these issues can be judged. As one of the largest conveyancing legal firms in Scotland, over the last few weeks we have been running a series of news items looking at the impact of Brexit upon the Scottish property market.

    It is worth looking at the articles which you can find at our website; our aim has been to consider the implications of Brexit on the general assumption that it will be a negative influence. Our investigations suggest that the impact of Brexit will be felt very differently depending upon the location within Scotland. It is the impact upon volumes within the Scottish market that will be most relevant (the Scottish market is still, in volume terms, 35% below its 2007 level) and which will ultimately dictate the impact upon prices

    McVey and Murricane, Solicitors, Glasgow