Over the last couple of years we have seen some significant swings in the Scottish property market. This is an area of the UK which is currently attracting much concern and uncertainty amid calls for a second independence referendum and fallout with the UK government on the subject of Brexit. Therefore you would be forgiven for assuming that the Scottish residential property market would be under something of a cloud. However, think again!
Scottish property prices moving higher
The Your Move/Acadata House Price Index has cast a very interesting light on the Scottish residential market confirming that property prices increased by 0.6% between August and September. This now takes the average cost of residential property in Scotland to more than £170,000. The actual figure stands at £170,762 which is up 2.5% over the 12 month period.
In some circumstances property price rises can be the result of bargain-hunting or a rebound after a difficult period but this does not seem to be the case. The Office for National Statistics (ONS) reported a 20.9% month on month increase in property transaction numbers in June. A total of 8,620 properties were registered during June indicating significant strength behind the recent rally.
General increases in all areas
Those who have visited Scotland will be well aware that there are many rural property markets as well as the likes of Edinburgh/Glasgow and many in between. Quite often, as we have seen with the London market, it tends to be the luxury property markets which benefit greatest in times of recovery. However, this latest ongoing recovery in Scottish property prices takes in those towards the bottom end of the market and those at the top end.
Would you be surprised to learn that three areas of Scotland reported property price growth over the last 12 months in excess of 10%? East Dumbartonshire saw prices increased by 10.3%, East Renfrewshire by 10.2% and East Ayrshire by 10.1%. The largest monthly increase, between August and September, was seen in Dundee with residential property prices rising by 4.5% to an average £139,405.
Edinburgh property prices
In much the way London is seen as a bellwether for the English property market, Edinburgh has a same reputation when it comes to Scottish property prices. Between August and September the average Edinburgh property increased in price by 3.1% and now stands at £250,477. There have been concerns that businesses and wealthy individuals were thinking of leaving Edinburgh in light of the economic uncertainties surrounding independence and Brexit. However, these figures would seem to indicate this is not the case.
Challenges ahead
As we touched on above, a potential rerun of the 2014 independence referendum together with questions regarding Scotland’s future role within the European single market will impact sentiment and investment. Since the Brexit vote earlier this year there have been many warnings regarding Scottish property prices and concerns that the uncertainty would drag the market down. This recent report into Scottish property seems to indicate very little impact over the last few months although time will tell.
Perhaps, if we were to flip the coin onto the other side, potential independence for Scotland and a rewriting of its relationship with the European single market might turn out to be the most positive change Scotland has seen for many years?