The average house price in Scotland in February was £182,936 – up an impressive 7.3% on the same period in 2017.
This signifies a much stronger performance than in England and Wales, where house prices only increased by 0.7% year-on-year.
Of the 32 local authorities in Scotland, 28 saw average property values grow year-on-year. Prices also reached record highs in 10 of those areas, according to the Your Move Acadata Scotland House Price Index.
This means that Scotland is now seeing its highest year-on-year house price growth since April 2008 (which was at the end of the last housing boom). So what’s causing it?
- If you’re considering buying a property and want expert, impartial advice on your mortgage options, call Which? Mortgage Advisers on 0800 197 8461.
What’s happening to Scottish property prices?
Over the past year, Edinburgh has been responsible for 28% of the increase in Scottish house prices.
In part, this may be explained by the number of properties for sale being well down on previous years, making for a competitive market for buyers – and, as a result, higher prices being paid.
The Glasgow market is also performing well, with properties there accounting for 14% of house price growth in Scotland.
But it’s not just the big cities that are booming. In terms of year-on-year increases, East Renfrewshire has seen the highest house price growth in Scotland, up by 15.1% (£35,740, on average). In total, seven areas saw double-digit growth.
You can see activity for each local authority in Scotland in the table below.
House prices: the facts behind the figures
It’s always dangerous to take average house price figures at face value, and this case is no exception.
While the Scottish property market is indeed enjoying faster value growth than the rest of the UK, a couple of factors led to particularly strong figures for February.
Firstly, February tends to be the month with the fewest property transactions in Scotland, meaning the average is based on a smaller dataset. Over the past four years, there have typically been around 5,500 transactions in February, compared with 9,500 in June, the busiest month.
If fewer transactions are taking place, any anomaly in the market can have a bigger impact on the average price. In this case, Your Move says that the release of eight new-build properties in Edinburgh’s Morningside neighbourhood, which sold for an average of £1.15m each, pushed up the rate of national annual growth by an extra 0.3%.
Find out more: buying a house in Scotland
How to spot an up-and-coming area
Whether you’re a first-time buyer keen to buy in an affordable but up-and-coming neighbourhood, or a buy-to-let investor hunting for a property that will grow in value, there are steps you can take to identify whether an area is on the up.
It’s always worth talking to local estate agents and researching recent sold prices in the individual street or postcode area you’re looking at. This will reveal what’s going on at a local level, which will give a much clearer indicator of potential future value growth than national or even regional averages.
You should also look out for the following factors, all of which can indicate that property prices may be on the rise:
- Big infrastructure projects: for example an upcoming rail link or regeneration of the town centre
- Thriving nearby towns: when property prices climb in desirable areas people often flock to the surrounding neighbourhoods
- Gentrification: new delis and coffee shops often signify an area on the up
- Skips and scaffolding: these demonstrate that owners are investing in their properties and improving the housing stock
- Improving schools: if a school has been given a better Ofsted rating than the last time it was inspected, more people will want to live in the catchment area.
For more advice on property investment hotspots and investigating a new neighbourhood, visit our guide to finding the best place to live.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.