September 2022 Real Estate Market Update
Real Estate Market Highlights
The Scottish property market continues to grow after surpassing the average house price of £200,000.
Predictions that real estate market growth may soon stagnate amid a cost of living crisis remain to be seen in practice.
Buyers continue to pay above home ratio valuation when selling.
Homes are selling faster year over year in markets.
The Scottish property market continues to grow
The average house price in Scotland has risen 20% since the start of the COVID pandemic, reports The Scotsman. According to the Halifax House Price Index, prices have risen steadily over the past two years, reaching an all-time high in June 2022 – with the average cost of a Scottish property topping £200,000 for the first time.
The market saw moderate growth from May to July 2022, with buyer popularity concentrated in Edinburgh, Lothians, Fife and the Borders. Across all these areas house prices rose by an average of 4.8% to £288,993 year-on-year, according to the ESPC.
ESPC CEO Paul Hilton commented on the market’s continued success, saying: “It was another busy quarter for the property market – with continued growth in many areas, both in average property sales prices properties and how much buyers are willing to pay on home report valuation.”
Predictions that real estate market growth will soon come to a halt amid cost of living concerns that remain to be seen in practice
As the Scottish property market continues to boom, predictions that its progress may soon be stalled are growing, with suggestions that prices could stagnate over the coming year.
As millions of Scots prepare for a tough winter, Zoopla estimates the UK housing market will feel the effects of the cost of living crisis by the end of 2022, quickly ending record highs recorded over the past two years.
Rising mortgage rates are also expected to squeeze the market as more people are locked out of buying properties. Zoopla suggested, however, that our changing post-pandemic work habits may challenge that prediction, with the rise of working from home continuing to drive families away from expensive cities in search of bigger homes at more affordable prices. For some, the rising cost of living may spur the desire to relocate to save on running costs, supporting demand and market activity, Zoopla said.
While cost of living challenges will certainly affect the affordability of a home purchase for some buyers, the imbalance between buyer demand and the supply of new properties coming onto the market remains.
These supply and demand issues have helped push average Scottish house prices past the £200,000 mark for the first time.
Buyers continue to pay significantly above the home report’s valuation
As ESPC CEO Paul Hilton previously commented, Scottish buyers continue to pay above property ratio valuations (HRVs) for sale in all regions, with properties reaching 108.9% of their HRV on average, an increase of 3.6% compared to the period from May to July. 2021.
East Lothian saw the most growth, with buyers paying an average of 110.2% for HRV (1.7% more year-on-year). It is followed by Dunfermline, which achieved 110.1% HRV (a percentage increase of 3.9%). Then West Fife and Kinross hit 109.4% HRV (and the biggest jump in percentage points since last year at 4.8%). Edinburgh comes in last, with properties selling at 108.9% above HRV (a 5.7% increase in percentage points).
Homes sell faster year over year in local markets
In its latest property report, ESPC says properties in local Scottish areas are benefiting from a reduced time on the market. In many areas, the median time to market for homes has been reduced year over year to just 13 days.
Homes sold fastest in West Fife and Kinross as well as West and Midlothian, with a median time of just 12 days. In East Lothian, homes sold in an equally impressive 13 days.
In the nation’s capital, Edinburgh’s best-selling homes were in the east, north and west of the city, with a median of just 13 days on the market. In the Leith and Leith Links area, two bedroom apartments were purchased in just 9-11 days. The most notable change, however, was in Newington, where homes were bought 13 days faster than the May-July period last year and remained on the market for an average of 11 days.
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