House prices in Scotland rise again

House prices in Scotland rise again
House prices in Scotland rise again

THE average house price in Scotland have risen three per cent in a year topping £148,161, according to an index.

Across the UK, the typical house price in June stood at a new record high of £215,444, up 0.5% month on month, Nationwide Building Society said.

House prices are 2% higher than a year ago.

Robert Gardner, Nationwide's chief economist, said: "Annual house price growth fell to its slowest pace for five years in June. However, at 2%, this was only modestly below the 2.4% recorded the previous month."

Regionally, in the second quarter of this year, London was the only area where house prices are lower than a year ago - following a trend also seen in the first quarter of 2018.

In the second quarter, house prices in London stood at £468,845 on average - a 1.9% annual fall.

Despite the downward price movement in London, house prices there are still more than 50% above their 2007 peak.

By comparison, house prices in the UK generally are 15% higher, Nationwide said.

The East Midlands had the strongest annual house price growth in the second quarter, with prices up by 4.4%, followed by the West Midlands, which saw a 4.3% increase, and Wales with a 4% uplift.

In Scotland, house prices were 3.1% higher than a year earlier, while in Northern Ireland they have seen a 2.1% increase.

Mr Gardner continued: "Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.

"Overall, we continue to expect house prices to rise by around 1% over the course of 2018."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Tight supply, a healthy labour market and a continued lengthening of mortgage terms - 30-year loans now are common - will help to prevent prices from falling outright.

"But it is inevitable that house prices will grow at a slower rate than households' incomes during a period of rising mortgage rates."

He continued: "We expect the official measure of house prices to rise by just 1.5% over the course of 2018 and a mere 2% over 2019."

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: "On the one hand, the squeeze on incomes and unrealistic asking prices is reducing activity and confidence to move, particularly in price-sensitive areas such as London.

"On the other hand, the market continues to be supported by low interest rates and overall supply shortages, although we have found recently that listings and viewings are on the rise. This will translate into more sales if buyers and sellers recognise the new market realities."

Mark Dyason, Managing Director, Thistle Finance, said: "House prices in Scotland have surged over the past quarter compared to the rest of the UK.

"Over the past three months, Scotland is the only market to have delivered positive price growth.

"On an annual basis, price growth in Scotland is lagging behind Wales but significantly stronger than England, which is being weighed down by the capital.

"Despite continued uncertainty around Brexit and the ongoing squeeze on household finances, Scotland's housing market has a spring in its step.

‘We’re seeing a lot of development activity north of the border, as capital that would traditionally have stayed in London flows elsewhere.

“Against a backdrop of weak supply and relatively strong demand, prices in Scotland are likely to continue to edge up during the second half of the year."

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