Property Market Highlights
- Scottish property market continues to grow after surpassing milestone average house price of £200K.
- Predictions that property market growth may soon stall amid cost-of-living crisis yet to be seen in practice.
- Buyers continue to pay above Home Report Valuation at sale.
- Homes selling quicker year-on-year in local markets.
Scottish Property Market Continues to Grow
The average house price in Scotland has risen by 20% since the COVID pandemic began, reports The Scotsman. According to the Halifax House Price Index, prices have grown steadily over the last two years, hitting a record high in June 2022 — with the average cost of a Scottish property passing £200K for the first time.
The market has enjoyed moderate growth from May to July 2022, with buyer popularity concentrated in Edinburgh, the Lothians, Fife and the Borders. Across all these regions, house prices have increased by an average of 4.8% to £288,993 year-on-year, according to ESPC.
ESPC’s CEO, Paul Hilton, commented on the market’s continued success, stating, “it’s been another busy quarter for the property market — with sustained growth across many areas, both in the average selling prices of properties and the amount that buyers are willing to pay over the Home Report Valuation.”
Predictions That Property Market Growth Will Soon Stall Amid Cost-of-Living Concerns Yet to be Seen in Practice
Whilst the Scottish property market continues to thrive, predictions that its progress may soon be curtailed are increasing, with suggestions that prices could stagnate in the coming year.
As millions of Scots brace themselves for a challenging winter, Zoopla estimates the UK housing market will feel the effects of the cost of living crisis by the end of 2022 — putting a swift end to the record-breaking highs enjoyed in the past two years.
Rising mortgage rates are also expected to squeeze the market as more people are priced out of purchasing properties. Zoopla has suggested, however, that our changing work habits post-pandemic could challenge this prediction, with increased home-working continuing to push families away from expensive cities in search of bigger homes at more affordable prices. For some, the rising cost of living may boost the desire to relocate to save on running costs, supporting demand and market activity, Zoopla said.
Whilst cost of living challenges will certainly affect the affordability of a property purchase for some buyers, the imbalance between buyer demand and the supply of new properties coming to the market remains.
These supply and demand issues have helped catapult average Scottish house prices past the £200K mark for the first time.
Buyers Continue to Pay Significantly Above Home Report Valuation
As ESPC’s CEO Paul Hilton commented previously, Scottish buyers continue to pay above Home Report Valuations (HRV) at sale across all regions, with properties attaining 108.9% of their HRV on average, an increase of 3.6% compared to the period from May to July 2021.
East Lothian enjoyed the most significant growth, with buyers paying an average of 110.2% of the HRV (1.7% higher year-on-year). This is followed by Dunfermline, which attained 110.1% of HRV (a point percentage rise of 3.9%). Next, West Fife and Kinross achieved 109.4% of HRV (and the biggest jump in percentage points since last year at 4.8%). Coming in last is Edinburgh, with properties selling for 108.9% over the HRV (a percentage point increase of 5.7%).
Homes Selling Quicker Year-on-Year in Local Markets
In their latest property report, ESPC states that properties in local Scottish regions are enjoying decreased time on the market. In many areas, the median time for homes to go under offer has reduced year-on-year to just 13 days.
Homes sold the fastest in West Fife and Kinross as well as West and Midlothian, with a median time of just 12 days. In East Lothian, houses sold in an equally impressive 13 days.
In the nation’s capital, Edinburgh’s fastest selling homes were found in the East, North and West of the city, with a median of just 13 days on the market. In the Leith and Leith Links area, two-bedroom flats were snapped up in only 9 to 11 days. The most notable change, however, was in Newington, where homes were bought 13 days faster than the period from May to July last year and sat on the market for an average of just 11 days.
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