Property  

Scotland's housing market growth dwarfs UK

Scotland's housing market growth dwarfs UK

House prices in Scotland reached a new peak in November, dwarfing growth in England, Wales and Northern Ireland, according to the latest Your Move house price index. 

Annual price growth in Scotland hit 6 per cent in November and set a new average house price peak. By comparison, house price growth in both England and Wales have fallen by 1 per cent. 

A monthly increase of 0.7 per cent took the average cost of a home in Scotland to £186,142, up from £175,541 a year before.

Christine Campbell, managing director of YourMove in Scotland, said: "The Scottish market continues to go from strength to strength and its performance in recent months has been highly positive.

"When we’re seeing a slowdown in house price growth south of the border, it’s encouraging to see that Scotland’s housing market continues to exceed expectations."

John Tindale, senior housing analyst for Acadata, said one of the main factors behind why house prices in Scotland are rising at a faster rate than in England was affordability.

He said: "If we use the ONS definition of housing affordability, which is that of the median house price for an area divided by the average median earnings in that area, then Scotland comes out top of the 11 Government Office Regions (Gor) in Great Britain. 

"Scotland’s median house price in April 2018 was £149,125, the second lowest of the 11 Gor areas, with only the north east of England having a lower value, of £138,950.”

Tindale added: "Scotland’s median earnings, as published in the ONS Ashe survey (Annual Survey of Hours and Earnings), show Scotland having the third-highest level of annual earnings in Great Britain, at £29,286, only behind London and the south east. 

"The resultant affordability ratio for Scotland works out at 5.09, while in the North East it is 5.27, in Wales 5.67, in the south east 10.38 and in London 12.54.

"On the basis of this ratio, one can say that housing in Scotland is twice as affordable as it is in the south east of England.”

The rise in house prices in Scotland was found to be widespread, with average house prices in nine local authority areas reaching new highs in November.

In Edinburgh, prices rose 3.3 per cent in the month, accounting for half of the 0.7 per cent increase across Scotland. That took average prices there to £295,665, up 16 per cent annually, among the highest rises in the country. 

In Glasgow City, prices were up a more modest 0.1 per cent over the month, pushing prices to a new peak average of £165,245, up 6.7 per cent annually. 

The two cities accounted for nearly 60 per cent of the increase in average prices, on an annual basis.

Alan Penman, business development manager at chartered surveyor firm Walker Fraser Steele, said: "It’s certainly true that the Scottish market seems to be defying gravity. Looking at its strong fundamentals, though, it’s not immediately clear what's going to bring it back down to earth."