Scottish house sales in excess of £750,000 in 2021 are likely to be double those in 2018, according to the latest Scottish House Price Index from Walker Fraser Steele.
The report from the chartered surveyors this week revealed that average house prices in Scotland have grown by 9.3% over last 12 months and that transactions were up by 11% on 2019 levels.
Average house price
The average house price in Scotland now stands at £213,109, while 31 of 32 local authorities continued to see rising average prices over the year to the end of November 2021.
The reasons for this dramatic increase in top-end sales last year have been put down to the change in preference for larger properties combined with record low interest rates.
Transactions were up by 11% in 2021 on 2019 levels, according to the report from Walker Fraser Steele.Alan Penman, business development manager at Walker Fraser Steele, said: “The national growth rate in house prices of 9.3% remains exceptionally high.
“The ongoing ‘race for space’ continues to support demand for properties that offer the room to live and work in a pandemic environment.
“Working from home has changed where people want to live and the type of property they want to own.
“The subsequent increase in top-end sales last year has been a result of home movers seeking out properties better suited to their updated needs.
“Additional support was provided through the tax savings from the Land and Buildings Transaction Tax holiday that was available up to the end of March 2021.
More adventurous
“This encouraged the whole market to be more adventurous. Even now, competition among purchasers, a lack of suitable stock, and the continued very low interest rates supporting affordable mortgage debt means that there is currently plenty of good headwind to sustain prices.
“So while rates of growth in house prices may be stabilising in Scotland, the housing market in November still saw an increase in the average house price of £484, which is 0.2% higher than in October.
“Sales volumes from May to November 2021 look roughly on a par with, or slightly ahead of, previous years, perhaps suggesting that the market has now returned to its pre-pandemic transaction levels, but in summary it is fair to say Scottish house prices have enjoyed another strong year, often outperforming the UK average.”
How your region compares
The following figures show the average house prices across the north and north-east for November 2021 and the percentage change compared with November 2020.
Aberdeenshire £213,725 – change of 6.7%.
Highland £189,955 – change of 14.1%.
Orkney Islands £171,281 – change of 16.2%.
Moray £177,665, change of 11.3%.
Shetland Islands £171,992, change of 14.9%.
Aberdeen City £184,438, change of 6.7%.
The report showed that there were 977 sales in excess of £750,000 during the first 11 months of 2021, and it is anticipated that there will be at least 23 additional sales in November 2021, not yet recorded by the Registers of Scotland.
Sales of high-value properties to the end of November 2021 will “therefore likely reach 1,000 in number by the end of the month and approach 1,100 by the end of the year”, the report said.
“Hence annual transactions of £750,000 or higher in 2021 will likely double those seen in 2018.”
Unexpected results
The one area with a price fall compared to one year earlier was Na hEileanan Siar – but low transaction counts on the islands often cause unexpected results (there were just 25 transactions in Na h-Eileanan Siar in November, compared to over 700 in both Edinburgh and Glasgow).
On a weight-adjusted basis, six local authority areas in November were responsible for 54% of the positive movement in Scotland’s average house price and include Highland and Moray.
John Tindale, Acadata senior housing analyst said: “A national growth rate in house prices of 9.3% is exceptionally high, and does not occur particularly frequently.
“In the 166 months since January 2008, the national growth rate in house prices in Scotland has only exceeded a rate of 9.3% on 10 occasions, with seven of those occurring during the pandemic in 2021. Historic records would therefore tend to suggest that price growth will slow.”
Record levels
He added: “However, demand for properties with more space remains high. Rightmove reported that on Boxing Day 2021, property searches on their website set new record levels, with Glasgow featuring as the fifth most searched-for location in 2021, while Edinburgh stood in ninth position.
“Competition among prospective buyers for properties remains strong, which is helping to maintain current asking prices.”
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