Scottish house prices have continued to rise in 2018, according to the latest quarterly figures from an estate agency.
But there are signs that uncertainty over Brexit will damage the market in the coming months, according to Rettie and Co.
Their latest report says house prices in Scotland have continued to rise in 2018, up around 5% nationally from the start of the year.
Edinburgh and Glasgow lead the market in terms of demand and price increases, up 6% year-onyear, compared to 3.6% in Dundee and a decline of 1.1% in Aberdeen.
Andrew Meehan, associate director at Rettie, said: ‘The Scottish housing market has been more complex in 2018 than many commentators have previously noted. Broad headlines have made much of the strong performance of Scotland’s cities in contrast to softening sentiment south of the border, and this has certainly been true, especially in Edinburgh.
‘Led by a resurgence in the markets above the £325k LBTT band, submarkets in Edinburgh and Glasgow have seen record levels of transactions, and a reserve of unsated demand which has led to highly competitive closing dates.
‘However, across the whole market the picture has been more mixed, with total transactions in the first three quarters of 2018 down around 4% on the same time last year, mainly due to weaker trading in the volume market under £250k.
‘While demand and activity is up on long-term trends, there is a high degree of nuance in local markets that has been influencing the depth and competition for specific properties, understanding this detail has been crucial to success for both buyers and sellers over the course of 2018.
‘Looking forward, there can be no doubt that Brexit is playing a greater role in many people’s decisions-making process as its uncertain form lumbers closer. While the worst-case scenarios dominate press coverage, the reality for many households is that life factors are compelling drivers as well as economic scenarios and this has meant demand is still strong and prices robust in many locations, at least for now.’
Looking at the big cities, Andrew pointed to the fact that higher price house sales are helping the market.
He explained: ‘The average house price over the first three-quarters of 2018 is c.5% higher than during this period in 2017. Edinburgh and Glasgow have led the major cities, with the average house price up c.6% over this period. Dundee has lagged these centres at 3.6% and Aberdeen’s average house price is now under £200k, having fallen -1.1% year-on-year.
‘The rise in average house price across most areas has been fuelled by an upturn in activity in the upper bands of the market.
‘This rise has been particularly true of key neighbourhoods within Edinburgh and Glasgow. In these locations, the supply of quality homes has lagged demand, supporting rising house prices. Over the course of 2018, the market has caught up with this trend, leading to an increase in supply of properties as sellers have sought to make the move and take advantage of an active market.
‘This has seen supply increase in the most sought-after areas, with activity in secondary neighbourhoods reporting more difficult trading conditions.
‘The strongest annual growth in 2018 occurred at the start of the year, when a more active market from 2017 continued into the new year. Since then, growth has remained positive but slowed as the year has progressed.
‘Aberdeen has experienced a more mixed picture, but there are signs that the market is reaching a rebased level from which participants are more confident about participating in.’
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