House prices in Scotland have accelerated 1.4% annually, more than double 0.6% annual growth seen in the previous month, according to Your Move’s house price index for Scotland.
Property values have advanced 0.5% (£850) in a month, with the average home now costing £167,505.
However, growth is yet to hit a third of the speed seen in September last year, when annual growth was 5.4%.
Volumes are outpacing prices, as Sales in September are the highest for eight years, up 10% on a year ago.
Christine Campbell, Your Move managing director in Scotland, said: “House prices have taken off after a turbulent summer. Annually, house prices have increased by 1.4% (£2,282) compared to September last year, more than double August’s annual growth rate (0.6%), as momentum builds in Scotland’s property market again.
“Usually there is a decline in house purchase activity between August and September, as a lagged effect of the summer holidays. However, this month’s figures go against this trend. Despite other headwinds, this could be down to Scotland’s rising employment rate, increasing by 3,000 in the three months to September to 2,614,000 according to the ONS. With interest rates unlikely to change until 2017, low borrowing costs and near zero inflation should also help to pull up prices in the future.
“Regionally, this means that 23 of Scotland’s local authorities have seen annual price growth, up from 22 last month. However, prices are still lower in seven of the nine most expensive local authorities, as the Land and Buildings Transaction Tax is still preventing the top end of the market from taking off. There have been fewer high value sales since the introduction of the tax – keeping prices down.
“During September the average house earnt £850 – equivalent to £28 each day and is now worth £167,505. This would translate to 6.2% annual growth if it continued throughout the year. But we are currently still only seeing annual growth four times slower than a year ago, when house prices were rising by 5.4% annually in September 2014.
“Looking back at the past half-decade, Scotland has seen the second lowest price house price growth across Great Britain. Only house prices in the North of England have risen slower. Scotland’s house price increases have been generally steadier, growing by a total of 4.3% over five years, an increase of £6,866. However, this house price growth is much more sustainable than the 26.7% total increase in Scottish house prices, seen between 2005 and 2010 when prices shot up by £33,826.
“Scotland’s sales have also bucked the usual seasonal trend, increasing 3% over the previous month, while sales in England and Wales fell by 1.5% over the same period. In Scotland, sales will typically fall by 6% during this period which make the growth particularly significant. This month Scotland has had the strongest September sales since 2007, with 10% more sales this month than last year.”