The latest housing market update from Walker Fraser Steele and Acadata shows Scottish house prices have seen a slight annual increase of 0.4%, reaching an average price of £220,736 as of February. However, this represents a minor monthly decline of 0.2% from January’s average of £221,130, indicating a somewhat volatile start to the year in the housing sector.
The Scottish regions are witnessing varied trends in housing prices, with some areas experiencing significant growth and others seeing declines. Inverclyde leads with the highest annual growth rate, where house prices surged by 11.4% to £149,211 from £133,941 a year earlier. This notable increase is the strongest among all Scottish regions.
Conversely, Edinburgh has now surpassed East Renfrewshire as the most expensive local authority area in terms of housing, with average prices at £329,976. This is a significant development given that East Renfrewshire’s prices dropped by 4.4% over the year to £324,203 from a previous high of £339,167.
The least expensive area is West Dunbartonshire, with average prices falling by 3.9% to £143,908, positioning it below Inverclyde in the price rankings. South Ayrshire recorded the steepest decline overall, with prices decreasing by 5.7% year-on-year to £197,126.
Market Resilience
Despite consecutive monthly declines in the national average house price for the past five months, the housing market remains robust. Scott Jack, Regional Development Director at Walker Fraser Steele, emphasises the resilience of the housing market, “Given just how many headwinds the market and home buyers have faced, the total reduction in prices – since they peaked in June 2023 at £223,800 – only amounts to £3,000, or 1.4%. Housing remains remarkably resilient and we are also expecting some of the better market news of recent weeks may positively impact pricing in the coming months. Mortgage approvals across the UK are up 39% compared to the same period last year and this should feed into better completion figures and support prices.”
Positive Outlook Supported by Mortgage Activity
The housing market’s prospects are looking up, with a 39% increase in mortgage approvals across the UK compared to the same period last year. This rise is expected to lead to higher completion rates and help sustain house prices. February alone saw house prices rise in 18 local authority areas, two more than the previous month, signaling potential improvements.
Furthermore, the overall annual growth rate for Scotland turned positive in February 2024, marking an increase of £920 or 0.4% from the previous year. This shift towards growth, combined with increasing mortgage approvals, suggests a potentially stronger market in the upcoming months.