The average house price in Scotland sat at £220,351 in March, remaining unchanged from February, according to Walker Fraser Steele’s March House Price Index.
The research revealed that transaction levels in first three months of 2023 were at their lowest for over nine years.
However, sales volumes in the month increased by 36% over February 2023 levels. There is thus an increase in demand for purchases in the Spring, which has halted – at least for the time being – the decline in house prices which started in December 2022.
Despite seemingly stagnant prices, on an annual basis, prices at the end of March 2023 were £2,900, or 1.3%, higher than 12 months earlier.
This annual rate has fallen from the 2.8% increase seen in February 2023 – but given that the actual price did not move in March 2023, this slowing in the annual rate has been caused by the relatively steep rise in prices (+1.4%) that took place 12 months earlier.
Scott Jack, regional development director at Walker Fraser Steele, said: “Given the economic headwinds facing the Scottish housing market, this month’s data is all the more remarkable.
“Confidence generally in the market has held up relatively well with year-on-year house prices up by 1.3%. Sales volumes too are improved on February this year and are up 36%.
“The subsequent increase in demand for purchases has put the brakes on the slide in house prices that started in December 2022. The average value of a home at the end of March was £220,351.”
He added: “As we have noted before, the longer days of Spring have traditionally seen growth in housing sales in March in Scotland and this year is no exception.
“The affordability challenges that have deterred buyers in the first quarter of the year may be easing very slightly especially for those who choose to move and take fixed rate mortgages that protect from further rises.
“Despite the cost-of-living crisis, many agents are reporting plenty of enquiries for purchases and the right kind of properties for sale are still in short supply in many areas.
“Notwithstanding the return to the office country and village houses remain popular and in short supply. Home movers still want access to outdoor space, which, together with the need for a home office, are among homebuyers’ most popular requirements.”
In March 2023, 22 of the 32 local authority areas in Scotland were still seeing their average prices rise above the levels of 12 months earlier, one less than in February.
Interestingly, only one of the top fifteen areas ranked by value had price falls over the year, whereas in nine of the bottom seventeen areas ranked by value prices fell.
It would thus appear that the areas with higher-value homes have maintained rising prices over the year. The exception is Edinburgh, being the one area in the top 15 where the average prices of all property types – except terraces – have seen a fall.
The area with the highest annual increase in average house prices in March 2023, for the third month running, was Clackmannanshire, up by 15.8%.
The Clackmannanshire average values have been enhanced by the sale of a £780,000 5-bedroom detached home in Dollar.
Given the low volume of transactions in Clackmannanshire – only 50 for the period from January to March 2023 – the area is frequently associated with volatile movements in its average prices.
In second place is Midlothian, with an annual increase in prices of 9.4%. The gain in the Midlothian average price has been assisted this month by the sale of a detached home in the grounds of Melville Castle, with a price of £1.88m.
On a weight-adjusted basis – which incorporates both the change in prices and the number of transactions involved – there were six local authority areas in March which accounted for 50% of the £2,900 increase in Scotland’s average house price over the year.
The six areas are: South Lanarkshire (15%); Midlothian (9%); Perth and Kinross (9%); East Renfrewshire (6%); Highland (6%) and Aberdeenshire (5%).
The research also revealed that 20 of the 32 Local Authority areas in Scotland experienced falling prices in the month, the same number as in February 2023.
Of the 20 local authorities with decreases in price, 3 out of the top 10 areas when ranked by price had price falls, being Edinburgh (-0.0%), Stirling (-0.4%) and Aberdeenshire (-1.3%).
The largest increase in average prices in the month was in East Renfrewshire, up by 3.8%, where for the second month running, a further new build detached property in Newton Mearns was sold for £1.1m.
The upward movement of prices in East Renfrewshire, combined with the downward movement in Edinburgh prices, again places East Renfrewshire as the local authority area with the highest average house price in Scotland.
The area with the second-highest increase in prices in March was Dundee City, up by 3.5%. All property types in Dundee, except for terraces, saw an increase in average prices, with a newly developed four-bedroom home selling for £695k in Broughty Ferry.
Formerly a prosperous fishing and whaling village, in the 19th century Broughty Ferry became a haven for wealthy jute barons, who built their luxury villas in the suburb of Dundee. As a result, Broughty Ferry was referred to at the time as the “richest square mile in Europe”.
