The Scottish housing market experienced its second consecutive month of house price increases in May, despite a challenging financial climate.
The average house price in Scotland now stands at £224,033, a 1.2% (£2,600) rise on April, and a 1.9% (£4,125) increase from this time last year.
In terms of property type, flats saw the highest percentage price increase, up by 3.8%, followed by semis and terraced properties, both of which grew by 1.5% in May. East Lothian was recorded as the authority with the highest average price.
However, transaction levels are the second-lowest of the last decade, reflecting the broader trends in the market, notably the affordability challenges.
Scott Jack, regional development director at Walker Fraser Steele, said: “Affordability has become the key issue in mortgage lending and is impacting would-be buyers. Inflation continues to loom over the UK, and higher interest rates are an inevitability.
“The squeeze on borrowers will continue, and lenders have already signposted a contraction in the supply of mortgage loans over the coming months.”
Yet, he highlighted the strength of the Scottish housing market amidst these headwinds. “The resilience of the Scottish market is all the more remarkable,” said Jack.
He further explained the shift in consumer behaviour: “We can see how affordability is impacting the market in the demand and subsequent price rises attributed to flats. They now offer better value to buyers after months of subdued growth.”
