Sales are up but it’s not all plain sailing for Scotland

Kirsty Mcluckie looks at how the UK market compares

While still sluggish, property sales transactions in Scotland seem to be faring slightly better than the rest of the UK, according to this week’s UK House Price Index from Registers of Scotland.

However, while the number of sales is increasing, prices are more subdued with increases in average values in England, Wales and Northern Ireland, but a decrease north of the border.

The volume of residential sales in Scotland in December 2016 was 8,361 – up 6.5 per cent compared to December 2015.

This compares with stark annual decreases in sales volumes of 19 per cent in England, 6.9 per cent in Wales and 17.6 per cent in Northern Ireland.

However, prices in Scotland are not as buoyant.

The average Scottish property in February 2017 sold for £138,821 – a decrease of 0.6 per cent when compared to the previous month but an increase when compared to February last year.

The UK average is £217,502, up 0.6 per cent month on month and 5.8 per cent annually.

Kenny Crawford, director of commercial services at Registers of Scotland says: “Average prices continue to hold steady.

“February 2017 has continued the general upward trend seen in 2016, when every month – with the exception of March – showed an increase in average price when compared with the same month of the previous year.”

The top five local authority areas in terms of sales volumes were City of Edinburgh (1,002 sales), Glasgow City (977 sales), Fife (570 sales), South Lanarkshire (479 sales) and North Lanarkshire (454 sales).

The biggest annual price increase was in East Dunbartonshire where the average rose by 9.4 per cent to £195,967.

The largest decrease was again in Aberdeen, where prices fell by 9.6 per cent to £161,199.

Crawford says: “Average prices in the City of Aberdeen have been showing year-on-year decreases for each month since June 2015.”

Across Scotland, the average price for property purchased by a first-time buyer was £111,698 – an increase of 2.7 per cent on the previous year.

A separate study looked at the reason why those wanting to move home might be stymied and found that a proportion of homeowners have tried to move but decided against it due to the costs involved.

Nottingham Building Society found 11 per cent of mortgage customers – equivalent to around 1.2 million – have given up plans to move house in the past three years due to financial issues including mortgages.

The cost of stamp duty or LBTT stopped a significant number, while 3 per cent of would-be buyers had their application for a mortgage turned down.

The research follows the announcement from the Council for Mortgage Lenders that the “lull in moving activity appears stubbornly persistent” across the UK market and that it plans to launch a study into why the number of transactions seems in secular decline.

Nottingham Building Society’s research shows mortgage and tax payment issues are a factor, but it also found the biggest barrier to moving home was a lack of suitable houses.

Around 25 per cent of homeowners questioned for the study said although they wished to move, they could not find the right property.