Average House Prices in Scotland Hit a New All-Time Record High

House Price Rise

First-time buyers looking to get on the Scottish property ladder could be facing an uphill struggle this year as average property prices reach new record highs. For the seventh time within the past 12 months, the average market value of a home in Scotland has broken all previous records.

New data from the Walker Fraser Steele House Price Index indicates that the average price of a home in Scotland hit £218,702 in February 2022, an increase of £16,600 compared to February 2021.

On a monthly basis, Scottish house prices were up 1.5% in February compared to the month before, amounting to a one-month increase of £3,200 on average. This is the largest monthly increase recorded since August last year, with average house prices increasing in 30 of Scotland’s 32 local authority areas over the past year.

Only two areas recorded slight reductions in price over the past 12 months, which were Clackmannanshire and Aberdeen City. Meanwhile, the Orkney Islands saw the biggest gains of all, where average house prices increased by a huge 28.6% since the same time last year.

Competition remains ferocious

Senior housing analyst at Fraser Steel, John Tindale, highlighted similarities in the real estate sectors of England and Wales. Last month, all nine English and Welsh regions recorded all-time high average property prices, with Wales achieving the strongest annual growth rate of 8.9%.

“There is still high demand for such homes, but supply is limited, so there continues to be strong competition for the properties that do come on the market, with resultant price increases.”

Elsewhere, the regional development director at Walker Fraser Steele, Scott Jack, said that the way Scotland’s real estate sector has returned to strength was highly impressive.

“As a piece of context, in February this year, all the regions in England and Wales established new record average house price levels, but it is fair to say that the Scottish property market has robustly withstood one of the most seismic events in living memory in the past couple of years,” he said.

Shifting priorities and changing lifestyles

Analysts continue to cite the ongoing home-working trend as the biggest single contributor to explosive competition in the UK’s housing market.

Meanwhile, record-high rent yields across the country are motivating landlords and investors to expand their portfolios, putting even greater strain on the sector’s limited available inventory.

Even as the gradual return to the office accelerates, lifestyle changes brought about by the pandemic are likely to continue altering the public’s priorities in the long term. All of which is likely to sustain the housing market’s blistering performance indefinitely as demand continues to outpace supply by a clear margin.