Recent research has shown that average house price rises in Scotland are rising quicker than the rest of the UK on an annual basis. In June, average house prices in Scotland increased by 0.5%. Annual growth has now also grown to 4.6% from 2.9% the month previous. In this post, we’ll take a look at the state of Scotland’s housing market and then discuss whether Scottish housing is a good investment.
Scotland’s Housing Market
While prices in Scotland have now risen for 5 consecutive months, prices in England and Wales have now fallen for three months in a row (although annual growth still remains 3.3% here).
This level of price growth in Scotland now means that the average price of a home has risen to over £175,000. In total, prices have risen by £7,779 over the year, with the average price reaching £175,941. Sales are also up by 8%.
In terms of the spread of the rising house prices, Edinburgh and Glasgow are leading the growth, with prices up by 2.9% and 2.8% respectively in June alone. Over the course of the year, the areas have witnessed price growth of 4.6% and 10.6%.
This is incredibly interesting as it shows that the market is beginning to heat at both ends. For example, the average price of a house in Glasgow is £154,666, while Edinburgh’s £256,737 average is the second highest average house price by area in Scotland, behind only East Renfrewshire (£262,203). Only four areas haven’t seen prices rise in the last year.
Overall, this seems to show that Scotland’s property market is on an incredibly strong footing. With the biggest cities in the country showing strong growth fuelled by first time buyers entering the market, the fact that the number of transactions has also increased is incredibly encouraging.
However, more properties are required in the market. At the moment, the increase in transactions means that there’s a shortage of stock on the market, which means we could see some stagnation or a lack of opportunity. This lack of supply with increasing demand could ultimately lead to more first time buyers becoming priced out of the market; similar to what we have seen in London over the course of the past decade.
Should I Invest in Scottish Housing?
At present, based on this, it appears as though now is a good time to invest in Scottish housing, with prices on the up and no real signs of slowing due to the continuous nature of this growth.
However, with 10% deposits still required as a minimum deposit across high street banks, raising a deposit before prices rise too much can be difficult. This is why we’ve recently seen first time buyers look to more unconventional methods of saving, such as online trading with brokers such as Hantec.
That being said, average house prices in Scotland are still affordably at only just over £150,000, which means that there should be no real rush to invest. Plan effectively, save efficiently and you should still have no problems affording a home in this vibrant market; especially if Scotland speeds up the construction of houses to increase stock.