House Price Index

December 2016 - Scotland house prices increase by over £400 in December with 2.2% annual growth

Fast Facts

  • Average house prices increase by over £400 in December.

  • Shetland Islands surge 10.9% in December to new peak.

  • East Renfrewshire finishes 2016 ahead of Edinburgh as highest priced area.

  • New data shows September sales volumes highest in nine years.

Headline News

  • Prices keep edging up in Scotland, increasing 0.2% in December – a £408increase on the average home, now worth £172,204. Overall that leaves theaverage price in Scotland £3,687 up on the same time last year, and annualgrowth in prices at 2.2%.

  • Scotland still trails the 3.6% annual growth in England and Wales as a whole,but is outperforming Wales (2.1%), the North East (where prices were flat over2016), and London (1.3%). The market has largely seen steady growth since thespike in anticipation of the introduction of the Land and Buildings TransactionTax in April 2015 and the subsequent fall in prices.

Quick Quotes

Christine Campbell, Your Move Managing Director in Scotland, said:
"Scotland’s market continues to make steady progress, not hitting the highs ofsome other parts of the UK, but also missing the lows. It enters the new year ina good place.”"

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:
"Scotland has weathered the uncertainty of 2016 remarkablywell, supported by solid mid-market performance. The relatively modest growthbelies an underlying strength, which is now less dependent on the relativelysmall number of high value sales that can sway the average figures."

Key insights

  • Scotland has largely escaped the pricedrops seen at the top of the market inEngland.

  • In Scotland, prices in the top elevenlocal authorities (out of 32) havemodest growth of £2,100, or 1.0%with the most expensive area – EastRenfrewshire – seeing prices increase11.5% annually to reach £252,926at the end of December (overtakingEdinburgh). The only falls havebeen recorded in Aberdeenshire andAberdeen City (both down 4%,annually).

  • Lower priced property hasoutperformed the top of the marketgrowing 1.9%. The rise is supportedby solid increases in areas such asWest Dunbartonshire (up 7.1%) andClackmannanshire (up 6.1%). Thecheapest three local authorities haveall seen small dips in value over thelast year with Na h-Eileanan Siar (thecheapest area with prices averaging£105,376) down 0.2%, prices inNorth Ayrshire fell 5.9%, andInverclyde down 9.4%, making it thelowest performing area nationally onan annual basis.

  • Scotland’s mid-market has beendriving house price growth over the year. At the top of it, the Shetland Islands sawaverage prices surge 10.9% in December due to somehigh value sales. That saw a new peak on the islandsof £163,997 and pushed price growth there to 13.2%annually. Argyll and Bute, again swayed by highervalue sales, has also seen double-digit growth (10.6%).However, mid market performance also reflects solidgrowth in prices in areas such as Glasgow City (up5.9%, annually), neighbouring South Lanarkshire(5.7%) and Dundee City (up 5.1%).

  • Latest transaction data from the ONS, meanwhile,suggests that the cut in interest rates to 0.25%in August has provided a boost to the market.Transactions for September were up 10% on theprevious month and were 9% higher than September2015. With 9,352 properties sold, the total was thehighest for the month since 2007.

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