Strong growth in Scottish property market despite challenges

Scottish house prices have hit another record high for the third consecutive month, averaging £225,636.

According to the latest house price index by Walker Fraser Steele, prices have increased by 2.5% year-on-year and by 0.3% compared to April.

This milestone follows recent concerns about Scotland being declared a no-go zone for property investors due to rent caps.

Hat trick of record new house prices

Scott Jack, regional development director at Walker Fraser Steele, says the Scottish housing market remains strong.

He said: “Scotland’s residential property market gives us further cause for optimism this month as average home prices increased in May for the third month in a row.

“The market has remained remarkably resilient in recent years given the challenges it has faced but this month’s gain of nearly £600 (0.3%), represents the strongest performance for two years.  This is a hat trick of record new house prices over the past three months.

“Our data shows that Scotland’s average house price is now well in excess of £225,000 and comfortably above its earlier peak in September 2023. Clearly, Scotland is enjoying an earlier and stronger revival than across most of England and Wales.”

Market sentiment will improve

West Dunbartonshire saw prices shoot up by 12% annually to reach £153,786, marking the highest growth among local authorities.

Meanwhile, East Lothian experienced the biggest drop, with prices falling by 6% to £324,693.

Mr Jack adds: “At a local authority level, the market saw increases in 15 areas, and, with the onset of a new government, we expect market sentiment will further improve.

“The new government has already said it is supportive of the existing mortgage guarantee scheme which has been used to good effect in Scotland.

“Confidence will likely be further buoyed as the Bank of England begins to cut its base rate in the coming months.”