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According to the latest Walker Fraser Steele Acadata house price index, house prices in Scotland fell in January by the largest amount in 10 years.
The January 2023 index shows an average house price of £222,668, down 0.9% from December 2022, marking “the first real reversal in Scottish house prices since 2012”. This is the biggest drop in a single month since December 2012.
But it’s not all doom and gloom. Despite a decrease from the previous month, average house prices remain £9,700, or 4.6%, above the average prices 12 months ago.
The December index recorded a price increase of 7% per year to a record high of £225,520.
The index revealed differences between forms of ownership. In January, prices fell the most for apartments – by 2%, followed by terraces – by 1.6% and townhouses – by 0.6%. At the same time, the average price of a private house has not changed much.
In Scottish regions, 23 out of 32 local governments experienced price drops in January compared to December, including all 11 cost-leading areas. Adjusted for price changes and transaction volume, more than half (53%) of the decline came from four areas: Fife (-16%), Glasgow (-15%), Edinburgh (-15%) and Falkirk (-7%). .
Some of these figures are due to changes in property prices; For example, Glasgow and Edinburgh have the highest percentage of apartments sold each month.
However, if you look at the annual statistics, in 26 out of 32 local government areas, the average prices are still above the levels recorded a year ago. Six areas accounted for 51% of the total annual percentage increase, namely Edinburgh (23%), North Lanarkshire (7%), Glasgow (6%), Aberdeenshire (5%), East Renfrewshire (5%) and South Lanarkshire (5%). %). %). %). %).
While house prices have remained flat for 12 months, chartered surveyors Walker Fraser Steele says the monthly drop was “perhaps inevitable” given the recent economic turmoil and the impact of Christmas.
Scott Jack, director of regional development for Walker Fraser Steele, said: “This month’s key figures mark the first real change in the direction of house prices in Scotland since 2012. Most likely, we are observing a combination of factors that led to this fall.
“A fall in the average home price may have been inevitable given the sudden rise in mortgage financing costs and the economic turmoil caused by Trassa-Kwarteng’s mini-budget.”
He also says perspective is needed: “We must remember that despite the fall, the current median home price is still around £9,700, or 4.6%, above the average price 12 months ago.”
Acadata Senior Housing Analyst John Tyndale adds: “January and February tend to be the weakest months of the year for the Scottish housing market. When sales are low, subtle trends can stand out. For example, real estate agents report that the number of sales of properties that were previously on the rental market is becoming more prominent, and the government’s rent cap and future regulatory changes are scaring off investors in the sector.
“Even a small outflow of private investors into rental property will affect prices in the winter months.”
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