0:05 AM, 13th December 2024, About 10 hours ago
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Despite a recent rise in sales activity, the recovery of Scottish house prices has shown signs of slowing down, one index reveals.
According to Walker Fraser Steele, October saw a 0.6% monthly decline, the sharpest drop in more than two years.
This comes after several new market peaks earlier in the year, pushing average prices above £224,000.
However, year-on-year growth has slowed to just 1.3%, indicating a potential shift in the market’s momentum.
The firm’s regional development director, Scott Jack, said: “The recent steady and incremental recovery of Scottish house prices in previous months has fallen back in October’s data.
“Market conditions across Scotland softened with only 11 local authority areas recording rising prices in the month compared to 20 showing price falls and one remaining static.
“Prices are only 1.3% higher than a year ago and it seems clear that the underlying pace of recovery has slowed in recent months.”
The index reveals that market conditions softened in October, with fewer local authorities reporting price increases.
Only Highland and Clackmannanshire reached new market highs.
While some local authorities have seen significant year-on-year price increases, others, like Stirling and East Dunbartonshire, have experienced declines.
Despite the price slowdown, sales activity remains strong.
October saw an estimated 9,500 sales, a 20% increase compared to the previous year.
This trend has been consistent throughout 2024, with cumulative sales tracking 6% above 2023 levels.
Mr Jack said: “This year, Scottish property has been outperforming every other part of the UK but the market north of the border also has to navigate wider economic challenges.
“Housing markets run on sentiment, and the recent budget changes will soon show their impact.
“The Additional Dwelling rate increase from 6% to 8% has already spurred a rush to beat the 4 December cut-off, with reduced stock and higher rents likely outcomes for the private rented sector.”
He added: “The upcoming LBTT review in Spring 2025 is expected to affect all residential transactions, adding further uncertainty to the market.
“We can be fairly confident though that there may be some further slowing in the run up to the holiday period as there is no stamp duty rises in April next year as there are in England and Wales to force buyers’ hands.
“The outlook for 2025 looks brighter assuming wage growth continues, and rate cuts feed through over the course of the year.”
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