The Scottish housing market is facing its largest price fall in 14 years, with the average house price decreasing by £2,000 in February, following a £1,750 decline in January, according to the latest figures from Walker Fraser Steele.
Despite these setbacks, the average Scottish house price remains £6,300 or 3.0% above the average price of 12 months earlier, at £220,702.
Sales volumes have been low in January and February, but experts predict a rise in March.
Scott Jack, regional development director at Walker Fraser Steele, said: “Far from experiencing a storm, the Scottish housing market could be said to be navigating choppy waters.
“This is to be expected as January and February are typically slow months for house sales – in part because of the shorter days and extended holidays over the Christmas period.
“However, the seasonal lull in activity has been amplified by the rise in mortgage costs as a result of the ill-conceived Truss-Kwarteng mini-Budget.
“Amazingly, notwithstanding that onslaught, the current average house price still remains some £6,300, or 3.0%, above the average price of twelve months earlier.
“However, through a monthly lens, our index shows that in February 2023 prices continued their descent, falling by a further £2,000 in the month, on top of the £1,750 price decrease in January.”
John Tindale, Acadata senior housing analyst, provided further insights on the market: “During February 2023, it was the price of flats that again fell the most, down by -1.8% in the month. When sales levels are low, minor trends – which might otherwise have been obscured by the larger number of sales in the other months of the year – can stand out.
“For example, estate agents have been reporting that the number of sales of properties which have previously been in the rental market are becoming more noticeable, with the Government rent cap and future regulation changes deterring investors in this sector.”
As the Scottish housing market moves out of February, analysts will be closely monitoring transaction volumes.
“In each of the last eight years, March transaction totals have always exceeded those of February. We should expect higher sales volumes in next month’s data,” concluded Jack.
