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House Price Index

May 2017 - Glasgow drives the market in Scotland

Fast Facts

  • Average house prices rise 0.6% in the month to £175,070.

  • Demand from first time buyers and tight supply continue to support prices.

  • East Ayrshire is area with highest price increase over year.

  • Glasgow accounts for 60% of price increases.

Headline News

  • After a surge in April, house prices slowed in May, but continued to grow above trend, at 0.6%. It left the average house price in Scotland at £175,070, and prices up 3% on an annual basis. This, however, trailed somewhere behind the 4.3% recorded for England and Wales to May.

  • Activity continues to be driven by strong demand from first time buyers and weak supply; June’s survey for the Royal Institution of Chartered Surveyors shows surveyors reporting an increase in enquiries in May but stocks at all time lows and a further decrease in the number of new vendor instructions.

  • Average price rises are also heavily dependent on activity in Glasgow. The increase in prices in the City in May represented 60% of the total monthly rise of £1,014 seen across Scotland as a whole.

Quick Quotes

Christine Campbell, Your Move managing director in Scotland, said:

“After a surge in April, Scotland has returned to its long-term pattern of modest, but fairly steady price rises. That hides wildly different fortunes in its various areas, though, and price increasesare heavily dependent on a few key areas.“

“With suggestions of possible reforms to LBTT rates, it will be interesting to see how this impacts the Scottish market in coming months.“

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 strength of the market in Scotland’s biggest city is supporting continued house price growth in Scotland, but there also remains a fundamental imbalance in supply and demand. The demand from first time buyers is encouraging; we need to make sure we have the property to meet it.”

Key insights

  • On an unsmoothed basis house prices actually fell in May, but the three month average used to reduce the monthly fluctuations shows a better fit with the trend over the last two years, with prices rising gradually.

  • We’ve yet to see the impact the General Election result has on the market in Scotland, however; activity in May will have begun well before – in many cases prior to the election even being called.

  • Despite the slowdown, across Scotland just over half (17) of 32 Local Authority areas still saw prices rise in the month, compared with 21 in March. East Lothian saw the biggest increase in the month at 5.4%, boosted by the sale of the second most expensive property in Scotland this year, while East Ayrshire showed the strongest annual performance, up 13.2%. Again that reflects the sale of a high priced property: a home sold in Kilmarnock for £746,000 in a local authority area where average prices are just £125,550.

  • But it’s Glasgow that’s driving the market. It was one of only three areas to set a new peak average price during the month (£151,622) and prices are up 10.9% on the year. Flats, the most popular property type, have seen average prices rise from £124,000 to £127,000 in just the last three months. By contrast, Aberdeenshire, which is also contributing significantly, is dominated by the sale of detached homes.

  • Prices have risen from an average £260,000 to £280,000 over the same period. They’ve not yet recovered ground lost from the downturn in the oil industry, however, with prices as high as £290,000 previously.

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