By Norman Silvester For The Scottish Daily Mail
23:18 21 Jul 2024, updated 23:18 21 Jul 2024
The cost of buying a house in Scotland is going through the roof with homes selling better than properties south of the Border –including London.
Scottish house prices have shown an average increase of £6,868 in the past year, compared to £4,215 in England and Wales, according to new figures.
Stirling had the highest rise of £24,666; Edinburgh was up by £12,862; West Dunbartonshire £12,507; Clackmannanshire £10,454; and Argyll and Bute £9,557.
However not every part of Scotland is benefiting from the property boom.
Prices in previously oil-rich Aberdeen dropped by £1,124 between June 2023 and May 2024, while Dumfries and Galloway also experienced a fall. Estate Agents DJ Alexander say the average price of a house in Scotland has jumped from £184,567 to £191,435 in the past year.
Chief Executive David Alexander added: ‘The Scottish housing market has remained remarkably resilient over the last few years.
‘An increase of £6,868 equates to a 3.7 per cent rise over the year at a time when interest rates remain high and amid continued concern over the sluggish performance of the economy.
‘Despite all these factors almost every part of Scotland recorded an increase in average prices with four areas recording a rise of over £10,000 during the 12 months.’
Mr Alexander continued: ‘Edinburgh and Glasgow and their surrounding areas remain popular with high demand resulting in rising prices.
‘These figures indicate a housing market that remains robust and buoyant particularly in comparison to our neighbours south of the Border.
‘With interest rates likely to fall in the coming months, employment remaining high, and utility costs falling, these increases in Scottish house prices are likely to continue in the coming year.’
It is the latest good news for those selling their properties. In May, Savills predicted house prices in Scotland would grow at almost twice the rate of those in London over the next five years.
The estate agent forecast the value of the average property here will increase by 25.8 per cent by 2028, compared to a 14.2 per cent rise in London.
This would add around £47,000 on to the value of a typical house. Lucian Cook, head of residential research at Savills, said: ‘The outlook for 2024 has improved since our last forecasts as mortgage costs have nudged down slightly and are much less volatile.
‘The outlook for economic growth has also slightly improved, pointing to modest house price growth this year, with greater potential over the next few years.’
Another factor that has led to local spikes in prices is the election of the new UK Government.
Earlier this month it emerged areas with Scotland’s top state schools have seen property prices boom ahead of Labour’s tax raid on private schools.
East Renfrewshire, which has four schools in Scotland’s top ten for performance, is now one of the most expensive places in the country to buy property, with an average home costing £339,059.
Kay Blair, director of south Glasgow sales for estate agent Rettie, said: ‘The sale of larger family homes in these areas is driven by the school catchment area. It’s pretty mental at the moment.’
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- The Office for National Statistics has released its latest House Price Index
- Regionally, Yorkshire and the Humber had the strongest average growth
UK homeowners saw the price of their properties increase in value by an average of £6,000 last year, data suggests.
One London borough registered a hike of almost £30,000, according to the Office for National Statistics.
Online estate agent Purplebricks has developed an interactive calculator that allows MailOnline readers to look up their area and see the strength of the housing market locally.
Across the UK, houses increased in value by 2.2 per cent in the 12 months up to May, compared with 1.3 per cent in the twelve months to April.
Now, the average home costs £285,000 across the UK but breaches the £300,000 barrier in England.
Regionally, the biggest increase was reported in Yorkshire and the Humber (3.9 per cent).
Across London, average prices have increased by 0.2 per cent over the previous 12 months, although there are significant variations across the capital.
The City of Westminster itself saw prices fall the most nationwide, plunging 22.7 per cent to £933,000.
Prices fell by a similar amount in Hammersmith and Fulham (down 22.6 per cent to £727,000).
Yet prices rocketed by 4,9 per cent in Merton, a borough in the south of the capital that includes Wimbledon. The average property in the area is now worth £587,986.
Outside of London, Merthyr Tydfil in Wales saw home prices drop by 14.5 per cent.
Scotland, meanwhile, logged the highest percentage increases, with a rise of 13.3 per cent in Stirling.
In England alone, Bath and North East Somerset saw properties gain the most value.
Properties in the region enjoyed an annual price rise of £44,910 in the 12 months to May, marking a 10 per cent rise.
Vale of White Horse homeowners were also big winners. Homes in the Oxfordshire district shot up £41,633 or 9.8 per cent over the last year.
Across the entirety of the UK, average house prices increased in value by £4,000 in Northern Ireland and Scotland (up 4 per cent and 2.5 per cent, respectively).
Prices jumped by £5,000 in Wales (up 2.4 per cent).
Across England, the 12-month increase registered in May was 2.2 per cent – double the 1.1 per cent annual jump logged the previous month. Average prices now stand at £302,000.
Purplebricks CEO Sam Mitchell said: ‘Homeowners appear reassured by the arrival of the new government, and the stability that brings to the market.
‘Things will only get more positive if Labour makes early progress on their pledge to build 1.5million new homes.
‘That influx of new properties will help first-time buyers get their first foot on the ladder, in turn creating movement across the entire market.
‘Early indications already suggest demand is returning to market after a period of hesitancy while the general election and Euros were on. Interest rates are also being cut in anticipation of a Bank of England rate cut in August or September.’
Meanwhile, rental prices slowed. Average private rents across the UK increased by 8.6% in the 12 months to June, edging down from 8.7 per cent in the 12 months to May.
In June, the average private rent in Britain was £1,271 per month. This was £101 higher than 12 months earlier.
ONS figures also indicated on Wednesday that UK inflation held steady in June. The rate of Consumer Prices Index (CPI) inflation remained unchanged at 2 per cent.
This means that prices are still rising but at a rate that the Bank of England is comfortable with, after nearly three years of above-target inflation.
Richard Harrison, head of mortgages at Atom bank said: ‘The fact that the ONS has now reported three months of straight house price increases is a good indication of the growing confidence in the market.’
He added: ‘Eyes will now turn to the Bank of England, and when it will look to start reducing bank base rate, as reduced rates will also serve to boost buyer confidence. With inflation continuing to move in the right direction, it’s simply a question of when, not if.’
David Hollingworth, associate director at broker L&C Mortgages, said: ‘The rate of inflation held steady at the Bank of England’s target rate of 2% in June.
‘That is positive news and another month’s reading at the Bank’s target rate will buoy the hopes of those wanting a base rate cut sooner rather than later.
‘However, many anticipated a further, even if slight, decline in inflation this month and the likelihood of (a Bank of England Monetary Policy Committee) decision to cut in August will remain in the balance.
‘Although borrowers can still expect to see base rate fall this year, they should also be prepared for rates to be held a little longer.
‘On the upside, mortgage rates have been improving in recent weeks.
‘A flurry of price changes is gradually helping to drag fixed rates down, albeit slowly. As long as today’s figures don’t disappoint markets, we should see that trend continue.
‘Competition is fierce in the market which has seen lenders regularly edging rates back down, unwinding increases in recent months.
‘Lenders often have little margin to play with, so any move in market rates can have an impact on fixed rate pricing in either direction.
‘Today’s figures are not likely to add any additional boost to the recent cuts in mortgage rates but nor should they disturb the current level.’
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- Cornwall Council has given Rock and St Minver a taxpayer-funded £600K grant
- Seaside hotspot has been awarded windfall to build a new community centre
- One resident said: ‘This isn’t right. Other parts of Cornwall need facilities more’
It’s a millionaires’ playground favoured by celebrities, Royals and hordes of super-wealthy second-home owners.
Which is why some locals are asking why Cornwall Council has given the villages of Rock and St Minver a £600,000 taxpayer-funded levelling-up grant.
The seaside hotspot, where average property prices soared to £1.2 million last year, has been awarded the windfall to build a new community centre.
The Government’s Levelling-up fund is supposed to benefit Britain’s poorest areas.
But pretty fishing village Rock is one of the most expensive places to buy property in the country.
The wealthy are attracted by its secluded coves, well-stocked delis and upmarket restaurants, including Rick Stein’s The Seafood Restaurant across the Camel Estuary in Padstow.
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Princes William and Harry have been photographed surfing in nearby Polzeath.
Homeowners include chef Gordon Ramsay, who has a £5 million mansion overlooking the sea, Fifty Shades Of Grey author E.L. James, who bulldozed a bungalow to build a £2 million clifftop pile, and Foreign Secretary Lord Cameron, who paid £2 million for a holiday home in a nearby village.
The £600,000 Government grant was awarded after an application from the St Minver Community Hub trust to replace huts used by local scouting groups and football teams.
The group had already raised another £300,000 from donations to begin construction work.
Last night, baffled locals questioned why they had qualified for the grant.
Margaret Marshall, 86, who has lived in the area for more than 40 years, said: ‘Do we really need it?
‘I understand why local people think other areas of Cornwall are in greater need of levelling-up.
‘Another long-time resident Patricia Core said: ‘This just isn’t right. Other parts of Cornwall need facilities far more.
‘If they want to level us up then provide housing we can afford or a GP surgery we can get to.’
One woman, who asked not to be named, said she was ‘absolutely gobsmacked’ at the £600,000 grant, while another described it as a ‘vanity project’.
Residents pointed out that there were already numerous public buildings serving the community.
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However, Maureen Dodd, 87, defended the plans for a new building, saying: ‘It will be great for children and they’re including a cafe where older people can meet.
‘We’re not all millionaires here. We’re just ordinary people who have worked for a living.’
The Government’s £4.8 billion Levelling-up fund was launched in 2020 to improve infrastructure in Britain’s poorest areas.
Local authorities were tasked with allocating grants to areas ‘most in need’ based on factors such as economic recovery and growth, transport links and the need for regeneration.
The Cornwall and Isles of Scilly councils was given £137 million to hand out to community organisations.
Some areas of Cornwall are among the poorest in Britain. Around a third of children under 15 living in Penzance Quay are growing up in poverty, according to government figures.
But Rock is the UK’s third most expensive village, with house prices almost three times higher than the average figure for Cornwall, according to estate agents Yopa.
Last night, a council spokesman said: ‘The perception of the area from the outside is of luxury seaside houses, but people fail to see the deprivation a few yards away.’
She said the new building will replace ‘outdated’ timber huts and will ‘deliver a wide range of much-needed facilities and activities targeted at those most in need in the community’.
- Average value of a home in Britain is forecast to rise 21.6% by the end of 2028
- Savills said prices would rise 2.5% this year, previously predicting a 3% drop
House prices will rise by an average of £61,500 in the next five years according to estate agent Savills, after it revised its prediction upwards from six months ago.
The average value of a home in Britain is forecast to increase 21.6 per cent by the end of 2028, according to Savills.
The estate agent has revised that forecast, up from 17.9 per cent in November last year.
It has also revised its annual forecast, which now stands at an increase of 2.5 per cent for 2024.
Savills had previously expected house prices to fall by 3 per cent this year, but made the revision on the back of falls in the cost of mortgage debt.
Savills suggested that the number of housing transactions would reach 1.05million this year, slightly up from the 1.01 million forecast at the end of last year.
However, it said that the housing market remains sensitive to short-term fluctuations in the cost of debt and political uncertainty in the run up to the General Election.
Lucian Cook, of Savills, explained how the outlook for house prices has improved since the agent’s previous forecast last November as mortgage costs have ‘nudged down slightly’.
He added that mortgage costs were now ‘much less volatile’.
Mr Cook said: ‘The outlook for economic growth has also slightly improved, pointing to relatively modest house price growth this year, with greater potential over the following few years.’
He suggested that in November, buying a property with a 25 per cent deposit on a two year fix could cost 5.34 per cent.
By contrast, that same mortgage would now cost 4.84 per cent, while a five-year fix could cost 4.5 per cent, according to Mr Cook.
He said: ‘The higher cost of debt dampened demand and put downward pressure on prices.
‘However, the highly competitive nature of the mortgage market has meant that lenders have fairly aggressively priced in the prospect of cuts in bank base rate, causing buyer confidence, and prices, to recover somewhat.
‘This has caused monthly mortgage approvals to rise above 60,000 in February and March, with annual house price growth standing at to 0.6 per cent at the end of April.’
However, Mr Cook went on to say that continued uncertainty in the Middle East and higher than expected US inflation have meant that swap rates – which lenders base their fixed rates on – have continued to rise.
He said ‘Consequently, we are unlikely to see a further meaningful fall in mortgage rates this year, with the potential for short-term fluctuations in the cost of debt and house prices, as seen over the past week.
‘Similarly, an Autumn election could impact sentiment towards the end of the year, though polling suggests that most buyers and sellers will have already factored in a change of Government, which will minimise the impact,’ he concluded.
Savills suggested that affordability issues will become a factor towards the end of the next five year period, particularly in the ‘already stretched markets’ of London and the South East.
While the substantial increase in house price is expected to be north of £60,000 in the next five years, there are regional variations.
In some areas Savills predicts they will rise by 28.8 per cent, which is the case for the North West, while in other locations, such as in London, they will rise by half that amount at 14.2 per cent in the next five years.
The North West is followed in the rankings by Yorkshire and the Humber, which is only just behind at 28.2 per cent.
Write the housing market off at your peril
Wales and Scotland are also expected to perform strongly, with price growth around 26.4 per cent and 25.8 per cent respectively.
North London estate agent Jeremy Leaf, said: ‘These are particularly interesting figures suggesting an improvement in prospects for the UK housing market as they arrive hot on the heels of the forecast that the UK will be the slowest growing economy of the wealthiest G7 countries next year.
‘Write the housing market off at your peril. Continuing resilience may be surprising to many but not those of us working at the sharp end. Despite lingering concerns about the cost of living and a slower-than-expected fall in base rate, underlying demand for housing remains strong.
‘However, improving choice means only realistic sellers are able to take advantage, even though some prices may soften in the short term at least.’