Across the UK the early signs of autumn are evident. But in a season where everything tends to die back, we have seen early growth for the property market – and such growth is particularly strong in the Scottish market.
Earlier this month ESPC unveiled its latest House Price Report for September, showing that average sales prices had seen an annual increase of 4.9% from July to September, with a new average of £290,259.
Prices rose 4.7% in Edinburgh to £307,850, and 8% in the Borders to £240,052. In West Fife – the most affordable region – they rose 5.8% to an average property selling price of £229,635. Within Edinburgh, prices rose 14.1% in the city centre to £349,278 and 9.7% in the south of the city to £366,241.
The report showed that properties in the Lothians, Fife and the Borders achieved 102.2% of their Home Report valuation during the period.
The number of sellers and buyers to market is increasing and driving demand. The volume of properties coming to market rose 13.5% on the same period last year while sales volumes rose 19.3% year-on-year. Properties tended to continue to sell quickly at 22 days, or just over three weeks, according to the ESPC data. In West Fife, however, this was much faster, with properties there enjoying a median selling time of 15 days.
September’s House Price Index from Rightmove also showed encouraging progress for the Scottish market. It showed a year-on-year increase of 2.1% in house prices for Scotland, with an average property price of £194,180. Its figures suggested that Scottish properties are selling at the fastest rate of any region in the UK with a 33-day average – nearly half that of the overall 60-day average for a seller to find a buyer in the rest of the UK as a whole.
Confidence driven by falling interest rates and mortgage rates
Several factors are driving the early growth the Scottish property market has witnessed this autumn. Most notable of these are interest rate cuts that are beginning to push down mortgage rates.
Although the base rate was held steady at 5% in September the 0.25 percentage points cut in August did much to stimulate demand. A further 0.25 percentage points cut is expected from the Bank of England in November’s meeting of the Monetary Policy Committee and some economists believe that a December base rate cut could also be on the cards.
There will still be nervousness around longer-term affordability, however, which will become clearer when Labour unveils its first budget at the end of the month. The 30 October announcement will focus on plugging the government’s £22bn fiscal black hole and proposed changes, such as taxation, could have a big impact on whether the early autumn interest in the property market continues or not. For now, the signs are encouraging and the pace of buyer and seller interest in the Scottish property market is likely to continue into 2025 and beyond, particularly as interest rates fall further.