May 23

Scottish housing recovery stronger than in North of England

Scottish house prices are no only 2.4% below their April 2008 peak, compared to 8.1% in North of England according to the recent LSL Scotland House Price Index.

Average prices in Scotland are up £6,435 in a year, the highest annual rise since October 2010.

House prices set a new record in Aberdeen City, up 17.1% over the last 12 months whilst in the first quarter 2014 sales rose 25% compared to the same period in 2013 fuelled by home movers and increased supply.

Donald MacLellan, Chairman of Walker Fraser Steele Chartered Surveyors, part of LSL Property Services, comments: “For households all across Scotland, there is light at the end of the tunnel.  The average price in Scotland is now only 2.4% (£3,900) below its pre-recession April 2008 peak. The recovery in Scotland has now taken a stronger grip than in the northern most regions of England.  Just south of the border lies a reminder of the challenging road back from the depths of the recession, with the average price in the North of England still lingering 8.1% below their 2007/2008 pre-crisis peaks. As the independence vote looms on the near horizon and the debates become more ferocious, it will be interesting to note if this has any impact on current trends

“The Help to Buy scheme and buoyed demand from first-time buyers has been the catalyst spurring forward the Scottish market. Sustained growth is bedding down across the country and on an annual basis, average property prices have risen in 66% of all areas of Scotland. The flagship success story is Aberdeen, where average house prices have reached a new record of £219,117 in March 2014, after 17.1% annual growth.  The revived confidence at the bottom of the property ladder is rising up through the rungs, emboldening home movers to take the plunge after years of hesitation.  The highest increase in sales has been in classic family semi-detached homes, rising 28%.  As activity levels strengthen throughout the price ranges, overall sales in Scotland are up 25% in the first three months of 2014 compared to the same time last year.

“Housebuilding initiatives and replenished supply are also greasing the wheels on the highway of recovery.  New waterside developments and a fresh wave of housing stock in Inverclyde have helped raise average house prices in the area by 19.6% over the past year, the highest annual growth experienced in Scotland.

“However, there’s still a note of caution and the recovery still requires nurturing. There are corners of the country where the ‘feel-good’ factor has yet to be seen.  In Midlothian, average house prices have dropped 10.8% annually and two of Scotland’s seven cities suffered monthly house price falls in March 2014.  By keeping interest rates at a historic low, the Bank of England is maintaining the steady cost of borrowing and supporting housing market growth. But whether the uncertain fiscal impact of an independent Scotland will have ramifications for the wider recovery remain to be seen.”