Scottish house prices down despite surge in sales

Scotland has experienced its first dip in house prices in eight months despite a surge in sales, according to a new report.

House prices in Scotland have fallen for the first time in eight months. Picture: Scott Barbour/Getty Images
House prices in Scotland have fallen for the first time in eight months. Picture: Scott Barbour/Getty Images

Experts said the 1 per cent drop in February would be a “welcome reprieve” for those trying to enter the housing market.

In addition, the average house price was down compared to the same month last year, taking the typical cost of a home in Scotland to £168,020.

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However, there was a 19 per cent annual increase in property sales - representing the highest number of homes sold in February since 2008.

There was also change at the top of the table for the most expensive local authority area to buy a house, with East Lothian nudging Edinburgh into second place.

This was caused by a 3.2 per cent monthly drop on the average house price in the capital to £232,151 and a 9.1 per cent rise in East Lothian to £235,268.

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The findings were contained in the latest Your Move/Acadata Scotland house price index in which analysts recommend the annual changes be largely ignored as they reflect the one-off rise in prices that took place in February last year before the introduction of land and buildings transaction tax (LBTT) in April, rather than the market conditions in 2016.

Christine Campbell, Your Move managing director in Scotland, said purchase activity was concentrated at the lower end of the market as aspiring landlords sought out affordable options.

“We can see evidence of this in Edinburgh and Glasgow, where sales of flats - a popular investment choice - have soared in the three months to February 2016,” she said.

“But at the same time, there has been a slowdown at the top-end of the market due to uncertainty surrounding the upcoming Scottish Parliament election and EU referendum, particularly among foreign buyers.

“This imbalance between the volume of cheaper and more expensive property sales is skewing the overall measure of price growth, and tipping it downwards.

“For example, this hesitation at the prime levels of the market has hit average house prices in Edinburgh, knocking Scotland’s capital off the top spot and into second place in the ranking of areas by property value.”