In January 2023, the average house price in Scotland fell by 0.9% or £1,921, marking the first real change in direction for house price growth in Scotland since 2012.
The fall may be attributed to the slow transaction rates in the housing market during January and February, which could be a result of estate agency Christmas closures and reduced daylight hours for viewings.
The sudden rise in the cost of mortgage finance and the economic turmoil brought about by the Truss-Kwarteng mini-Budget may have also contributed to the fall in average house prices. The price of flats saw the most significant fall in January, down by 2%, followed by terraces and semi-detached properties.
However, the average price of detached homes remained steady during the month. Despite the fall in average house prices, the current average house price still remains 4.6% above the average price of twelve months earlier.
The largest fall in prices was seen in Fife, and the top 11 authorities by value all saw a price reduction. The average Scottish house price in January 2023 was £222,668.
Scott Jack, regional development director at Walker Fraser Steele, said: “The headline figures this month mark the first real change in direction for house price growth in Scotland since 2012.
“We are likely seeing a conflation of factors that have resulted in this fall. On a purely seasonal note, January and February are traditionally slower months for housing transactions in Scotland – partly as a result of estate agency Christmas closures and reduced daylight hours for viewings.
“However, a fall in the average house price was perhaps inevitable given the sudden rise in the cost of mortgage finance and the economic turmoil brought about by the Truss-Kwarteng mini-budget.
“But a fall in the average has not meant a fall across all property types. If we look beyond the headline average house price fall of 0.9%, we can see how the varied types of property stock fared differently over the month. During January it was the price of flats that fell the most, by -2.0%, followed by terraces, down by -1.6%, and semi-detached properties down by -0.6%. Meanwhile, the average price of detached homes remained steady during the month, with 0.0% price change. This is less surprising in so far as the more expensive detached properties tend to attract wealthier and more resilient buyers who are less impacted by the rising cost of mortgage finance.
“So, the average house price fall requires some perspective. We need to remember that in spite of the fall, the current average house price still remains some £9,700, or 4.6%, above the average price of twelve months earlier.”
