Scotland’s house prices soar by 27% since pandemic

Scotland has seen a remarkable surge in house prices since the start of the pandemic, according to a leading property firm.

DJ Alexander Ltd, Scotland’s largest estate and letting agents, said that average prices have increased by 27.4% since March 2020 when the pandemic began.

This is a stark contrast to the previous 40-month period, which showed an average rise of only 8.9%.

House price increases have slowed

The firm’s chief executive, David Alexander, said: “These figures show that, despite media concerns that house price increases have slowed in recent months, this is actually because they have risen at such an enormous rate since the start of the pandemic.

“Even without higher interest rates there would have to be a slowing of house prices simply because they have been rising at an unusually high pace.”

Increase has been uneven across Scotland

The increase has been uneven across Scotland, with both Edinburgh and Glasgow increasing at a much greater rate than much of the rest of the country.

Edinburgh’s average price increase is actually lower at 21.4% for the period from March 2020 to July 2023.

However, this is still higher than the 21.9% increase in the 40 months prior to this from December 2016 to March 2020.

Glasgow has had the greatest increase of any Scottish city with average prices rising by 33.5% since March 2020 compared with a 14.2% rise in the 40 months to March 2020.

Edinburgh is creating a ‘ripple effect’

Mr Alexander says that Edinburgh is creating a ‘ripple effect’ in the areas surrounding the capital with East Lothian prices rising by 59.7% in just under three and a half years.

Fife has seen house prices rise by nearly a third and West Lothian at 30%.

He explained that these areas were popular before the pandemic but the desire to live more rurally, with more outdoor space, coupled with easy access to the city is driving prices to high levels.

Affordability issues kick in

Mr Alexander said: “It is unlikely that these increases can continue in the long term because there must come a point at which affordability issues kick in with average prices already substantially higher than they were even a few years ago.

“The high levels of employment coupled with rising interest rates means that many homeowners are still able to afford to buy the home of their dreams.”

He added: “There will be a stabilising of prices and a return to lower annual increases, but we may not be at that point just yet and some parts of Scotland remain extremely popular.”

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