Property Market Highlights
- Strong market activity continues despite rise in interest rates and economic uncertainty
- Average property prices increase across Scotland, continuing the 2022 trend
- 84.9% of properties sold for or above Home Report valuations at sale between November 2022 and January 2023
- The median property selling time in January was 19 days, two days slower than the previous year
Strong Market Activity Continues Despite Rise in Interest Rates & Persisting Economic Instability
The Bank of England announced a further interest rate increase at the start of this month, with the rate rising by half a percentage point to 4% – meaning mortgage payments for homeowners and those looking to get on the market are likely to increase. Between this, the ongoing cost-of-living crisis, and the economic uncertainty caused by the war in Ukraine, the property market is expected to be affected as we continue to move through 2023.
Commenting on the news, Paul Hilton, CEO of ESPC, said, “The impact of the Bank of England raising interest rates by half a percentage point to 4% on 2nd February remains to be seen. It is the tenth increase in borrowing costs in a row and will add pressure to many households already struggling with the cost of living, as well as potentially impacting the number of mortgage products available.”
Despite these new challenges, market activity remains strong, with new property listings climbing across areas in Scotland, suggesting seller confidence continues.
Coastal properties saw a significant rise, with homes in South Queensferry, Portobello and Musselburgh enjoying a surge of 200%, 38.1% and 20%, respectively, in new property listings over the last three months. With many looking for additional space to accommodate their home working situations, this supports the trend that more people are seeking spacious and affordable homes outside the city centre.
New property listings in the Borders and Peebles increased by 0.7% and 35.7%, respectively during the same time period.
Average Scottish Property Price Increases Across The Nation
Following the upward trend seen throughout 2022, average house prices across the nation continue to increase year-on-year in many areas.
In Edinburgh, the Lothians, Fife and the Borders properties sold for an average of £284,614, enjoying a 5.6% increase. Fife recorded the highest price gain over the last three months, with properties in Dunfermline selling for an average of £205,705 – a 12.1% growth. In East Fife, properties sold for an average of £301,247, up 13.2% from last year.
In the capital, property prices hit an average of £302,073, a 5.6% increase, with one- and two-bedroom flats particularly popular with Edinburgh buyers.
Meanwhile, properties in out-of-town areas like Joppa and Portobello enjoyed an average value of £304,460, a 12.4% rise, while South Queensferry and Dalmeny properties rose to £312,458 – an increase of 11.6%. In Corstorphine, Clermiston, South Gyle and East Craigs, the average property price hit £410,751, an 8.8% growth. In Newington, The Grange and Blackford, properties sold for an average of £315,904, an annual rise of 5.8%.
84.9% of Properties Sold Over Their Home Report Valuations at Sale
Between November 2022 and January 2023, 84.9% of properties sold for their Home Report valuations or higher at sale, with properties achieving an average of 104.8%.
East Lothian attained the most over Home Report valuation, with properties achieving an average of 106.9% (a 3.8% decrease from last year). East Fife followed at 106.1%, a 2.4% annual decrease.
Properties in Midlothian achieved 105% of their valuations, a reduction of 1.4% year-on-year. While in the City of Edinburgh, properties hit an average of 104.5% of their Home Report valuation – a decrease of 0.7% year-on-year.
With some Scottish properties achieving upwards of 10% over their Home Report Valuations at sale in the last year, this news may discourage sellers but will undoubtedly benefit buyers.
Median Time Properties on Market Just 19 Days
Despite continuing economic turmoil, properties coming to market continue to sell quickly, emphasising strong buyer demand and competition.
The median time it took for a property to go under offer in January was just 19 days – two days slower than the previous year, yet up on 2019 and 2020, which saw average market waits of 23 days.
In West Lothian, homes went under offer the fastest, sitting for only 14 days on average. In Midlothian, East Lothian and the Borders properties also performed strongly, with a median selling time of only 18 days. In Edinburgh, homes sold the fastest in the city’s west with an average of 18 days.
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