Property Market Highlights
- Average Scottish house prices continue at record high beyond £200,000 milestone
- Property market remains largely unaffected by growing cost of living crisis.
- Supply and demand issues continue to cause growing house prices.
Average House Prices in Scotland Continue to Grow Beyond Record £200,000 Milestone
House prices across the UK have seen the first decrease since June 2021, albeit by a marginal 0.1% in July, but Scotland’s housing market continues to record soaring property prices, with a 9.6% annual growth rate since the start of 2022.
According to the Halifax House Price Index, the average cost of a property in Scotland passed £200,000 for the first time in June, hitting £201,549 — a rise of £18,142 compared to the same period in 2021, and the trend continued in July with houses now costing an average of £203,677.
While skyrocketing prices are no doubt welcome news for sellers, those looking to move face a challenging sellers’ market, according to Russell Galley, Managing Director at Halifax. Scotland, however, continues to boast some of the most affordable areas in the UK, with Northern Ireland and Wales enjoying similar annual house price milestones of 14.7% and 14.0%, respectively.
Property Market Remains Largely Unaffected by Cost of Living Crisis
Despite the growing cost of living crisis, the UK’s property market continues to be largely insulated, with unfettered price growth and persisting large-scale demand.
According to Galley, this can be explained by low-income households shouldering most of the strain from rising costs. Meanwhile, higher-income households continue to be active in the market, with mortgage lending at its highest since September 2021 — suggesting a rush to secure fixed mortgage rates ahead of interest changes predicted in the coming months.
Galley argues, however, that inflation-induced pressure on households is certain to increase, affecting affordability and likely slowing the market down further before the end of the year.
Supply and Demand Issues Continue to Result in Growing House Prices
Despite reports that post-COVID market growth would soon putter out, the Scottish housing market has defied all expectations. In June this year, house prices enjoyed a 1.8% month-on-month rise in average selling price — the biggest monthly rise since 2007. While annually prices rose 13%, the largest growth rate since 2004 according to the Halifax House Price Index.
Supply and demand issues continue to be the leading cause of growing house prices as demand far outstrips available properties on the market. According to Zoopla, while the UK-wide demand for homes has slowed steadily throughout 2022, it remains 25% above average.
As sellers continue to finalise buying their next home before closing the sale of existing properties and buyers hurry to beat rising mortgage interest rates, these issues are likely to persist.
If you’re considering buying or selling and are worried about the current situation, MOV8’s 5-star-rated team of property experts can confidently help you navigate the uncertain property landscape, supporting you through the process from start to finish.
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