The average house price in Scotland edged 0.6% higher to £223,655 in the year to August compared to a year ago, as transactions slowed.
House sales for the first eight months of the year, at around 60,000, are about 10% lower than 12 months ago, and — other than the pandemic year 2020 — the lowest since 2013, says the Walker Fraser Steele Acadata House Price Index.
It adds: “The Bank [of England base] rate is one of the prime reasons for the slowing in sales, having reached 5.25% at the time of writing – its highest level of the last 15 years.”
In the month to August, house prices were virtually flat, rising by “a very modest” £22 from July.
Across the nation, there were 16 authorities with price increases in August and 16 areas with price falls, which largely combined to “cancel each other out,” the report points out.
It says, looking at Edinburgh and Glasgow, which are the two largest housing markets in Scotland with a combined 22% market share, Glasgow saw price increases of 0.4% in the month, while in Edinburgh prices fell by 0.6%.
Walker Fraser Steele regional development director Scott Jack says: “In August 2023, the average house price in Scotland increased by £1,375, or 0.6%, over the last twelve months. This is the same growth rate as seen in July, and it is the weakest annual rate of growth since the near start of the pandemic in May 2020.”
Jack adds: “Lower levels of activity in the market are reflected in the volume of sales which, so far this year, are about 10% lower than the corresponding months of 2022. What this slowdown in activity does illustrate is that offers below the asking price are becoming more common.
“The restrained market sentiment may continue for some time, but with continuing strong earnings growth and the expectation that interest rates may be peaking from their July high, it could provide a soft landing for Scotland’s housing market.
“However, rates need to continue in a downward trajectory to persuade buyers back to the market.”
