Scottish property price growth double previous estimate

HOUSE prices in Scotland are set to rocket amid a post-lockdown boom in the property market.

The Treasury’s economic forecaster has doubled its previous estimate of the level of growth north of the Border for the whole of this year.

The Office for Budget Responsibility said it now expects prices to soar by 5.7 per cent this year (2021/22), compared with its previous forecast of 2.8 per cent in March.

It expects 2.2 per cent growth next year (2022/23), compared with its previous forecast of a 1.3 per cent decrease in prices.

Property agents say the market has been buoyant since it opened back up following lockdown, with homes ‘selling like hotcakes’ in parts of the country.

According to official house price figures, the average home in Scotland cost £166,566 in March this year. The OBR’s forecasts mean that figure is expected to soar to £176,060 by March 2022, and then to £179,933 the following year. Chris

Comfort, property partner at Aberdein Considine, said: ‘Demand is exceeding supply across many parts of Scotland, with properties being snapped up almost as soon as they hit the market, and this has the inevitable effect of pushing up prices. ‘In the Central Belt this meant an already strong sales market continuing to flourish and an acceleration in the upwards trend of house prices. ‘In other areas, such Aberdeen and the North-East, where the property market wasn’t as buoyant, we’ve seen what you might call a miniboom,

Strong demand: Chris Comfort with family homes in particular selling like hotcakes. How long this period lasts is anyone’s guess but now might well be a good time to look at the market if you’re thinking of selling.’

The house price projections were made by the OBR in a new report about devolved tax and spending forecasts.

It said that, across the UK, house prices have outperformed expectations since the beginning of the pandemic, and that residential transactions ‘rose sharply’ in the latter part of 2020 and into this year after dropping sharply in the first lockdown.

The report said: ‘These movements reflect changing housing needs as a result of the pandemic, the build-up of ‘forced savings’ flowing into house purchases, and timelimited transaction tax holidays.

‘Developments have been uneven across the UK in several respects.

‘While annual house price inflation has picked up everywhere, in England and Wales it peaked in June 2021 at 12.9 and 16.5 per cent respectively, whereas in Scotland it reached 16.9 per cent in August.

‘In 2020/21 as a whole, house prices rose by 4.5, 4.7 and 5.4 per cent respectively in England, Scotland and Wales.’

It said the number of transactions across the UK rose by 1 per cent in 2020/21, but transactions for the year as a whole fell by 6 per cent in Scotland.

As a result of the rising prices and transaction numbers, the OBR said the Scottish Government’s land and buildings transaction tax is expected to raise £731million this year, £80million more than its March forecast, and compared with £517million in 2020/21.

The figure is forecast to rise to £773million next year, £86million more than had been estimated in March.

‘Good time to look at the market’