Scottish Housing Market Review Q1 2023

2. House Prices

National

Source: Registers of Scotland / UK HPI

Scottish House Price Performance: National

Average house prices in Scotland, as measured by the UK HPI, increased in Q4 2022 by 6.0% relative to Q4 2021. Although this remains a high level of annual house price growth, this is down from the 11.7% annual house price growth to Q2 2022. The average property price (geometric mean) in Scotland stood at £190K in Q4 2022. More recent monthly data (which is more volatile than the quarterly averages) shows that house price inflation had fallen to 1.0% in January 2023.

Data from Registers of Scotland showed similar annual house price inflation in Q4 2022, of 6.5%. Registers of Scotland data is not mix-adjusted, so will be affected by the composition of properties sold. The average (arithmetic mean) house price in Scotland as at Q4 2022 according to Registers of Scotland data was £221K.

UK HPI data shows that annual price growth to Q4 2022 was highest for detached properties (9.4%). Flats increased by the lowest amount (3.1%).

Scottish House Price Performance by Dwelling/Buyer Type

Chart 2.2 shows the rate of change in the average new and existing build property price in Scotland. This data is published with a lag relative to the headline HPI. In Q3 2022, the average Scottish new build property price increased to a greater extent than the existing build price, rising by an annual 11.0% to £280K. The average existing build price rose by 7.7% to £187K. The large rise in new build property prices can be partly explained by the large increase in new build construction prices (see Chart 10.3).

Source: UK HPI (Scotland)

The UK HPI also shows that the average price of a property bought by former owner occupiers in Scotland increased by an annual 6.4% in Q4 2022, to £230K. Meanwhile, the average price of a property purchased by a first-time buyer increased by an annual 5.5% in Q4 2022, to £152K.

Scottish House Price Performance: Regional

Registers of Scotland data show that house prices increased over the one year period to Q4 2022 for all regions in Scotland, although to a varying extent. The largest increase was in the Ayrshires and Dumfries & Galloway, where house prices increased 8.6% annually to 179K (average arithmetic mean price; prices not mix-adjusted). The smallest increase was in Aberdeen/shire and Moray, where prices increased by 1.2% annually to £211K.

The longer-term trend (as measured by the change in house prices over the four-quarter period to Q4 2022 over the previous four-quarter period) also shows that house price growth has been positive in all areas of Scotland. The strongest price growth was seen in Argyll & Bute and Highlands & Islands, where house prices increased by 9.3%, whilst the smallest increase in house prices was again seen in Aberdeen/shire and Moray, where house prices increased by 1.0%.

A summary of the average house price in Q4 2022 by Scottish region is included below. This also includes the annual change in the average house price in Q4 2022, as well as the annual change in the average house price using a rolling four quarter period to Q4 2022, which smooths out volatility in quarterly data (Source: Registers of Scotland).

Table 2.1 Regional house prices

Aberdeen/shire and Moray

Average Price – Q4 2022 £211K

12 Month Change 1.2%

Annual change (rolling 4 quarters) 1.0%

Edinburgh, Lothians and Borders

Average Price – Q4 2022 295K

12 Month Change 6.9%

Annual change (rolling 4 quarters) 7.2%

Argyll & Bute and Highland & Islands

Average Price – Q4 2022 £223K

12 Month Change 6.6%

Annual change (rolling 4 quarters) 9.3%

Forth Valley

Average Price – Q4 2022 £210K

12 Month Change 7 .5%

Annual change (rolling 4 quarters) 7 .5%

Ayrshires and Dumfries & Galloway

Average Price – Q4 2022 £179K

12 Month Change 8.6%

Annual change (rolling 4 quarters) 8.5%

Tayside and Fife

Average Price – Q4 2022 £206K

12 Month Change 5.8%

Annual change (rolling 4 quarters) 5.8%

Clyde Valley

Average Price – Q4 2022 £201K

12 Month Change 8.3%

Annual change (rolling 4 quarters) 7.4%

Scotland

Average Price – Q4 2022 £221K

12 Month Change 6.5%

Annual change (rolling 4 quarters) 6.6%

Source: Registers of Scotland