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Scottish housing market is still defying expectations - David Alexander

David J Alexander
​Prices are increasing at a much greater rate than south of the Border, writes David Alexander

Scotland has experienced a sustained and substantial increase in house prices over the last four years which has defied expectations and predictions. Despite the whole of the UK facing the same issues of a cost-of-living crisis, higher mortgage rates, and soaring utility prices, the Scottish housing market has disregarded all these issues and continued to increase at a much greater rate than south of the Border.

In the 12 months to May 2024 the average price of a home in Scotland increased by £6,868 compared to a rise of £4,215 in England and Wales. In percentage terms the difference is even greater because house prices in England and Wales are higher. The average price of a house in Scotland rose 3.7 per cent over the last 12 months but only 1.4 per cent in England and Wales.

The average house price in Scotland is now £191,435, which is the highest figure ever achieved. However, within this overall average price there are substantial variations with Stirling recording the highest increase of £24,666; Edinburgh rising by £12,862; West Dunbartonshire up £12,507; Clackmannanshire higher by £10,454; and Argyll and Bute up by £9,557.

There were two falls in value last year with the largest in Aberdeen where average prices dropped by £1,124 and Dumfries and Galloway, which fell by £25.

Even more remarkable is that this trend has been happening for over four years. The Scottish housing market has risen by 27.1 per cent since the start of the pandemic in March 2020. There will be a number of factors for this but clearly people being forced to spend more time in their houses and increasingly working from home seems to have buoyed the market and kept prices rising in the intervening period.

These price increases have been remarkably consistent and widespread with growth across almost all parts of Scotland and four areas recording a rise of over £10,000 during the 12-month period.

Edinburgh and Glasgow and their surrounding areas remain popular, with high demand resulting in rising prices. People are once more being drawn back to live and work in or near our major cities. Urban living seems to be back with a vengeance with many wanting homes with easy access to a major city.

As prices rise in Scotland’s two major cities, we see the surrounding areas increase in popularity. The ripple effect out from Edinburgh is producing rapidly rising prices in East Lothian and Midlothian while East Renfrewshire and Renfrewshire have shown above average rises in the last year.

The substantial increases in Argyll and Bute and Clackmannanshire indicate a bounce back from recent falls in value over the last few years. The shift to rural and remote living has definitely subsided since its peak during the pandemic, but these areas remain attractive for a wide variety of people and will continue to be popular.

Overall, these figures are remarkably positive and indicate a housing market that remains robust and buoyant particularly in comparison to our neighbours south of the Border. With interest rates likely to fall in the coming months, employment remaining high, and utility costs falling I believe these increases in Scottish house prices are likely to continue in the coming year.

David Alexander is CEO of DJ Alexander Scotland Ltd

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