Average house prices in Scotland rose on a seasonally adjusted basis by £375 in July, or 0.2%, according to the latest House Price Index from LSL Property Services/Acadata.
This is the 11th successive month that house prices have risen in Scotland, and is the longest run of monthly gains since the succession of 19 positive months from August 2005 – February 2007, some nine years ago.
On an annual basis, house prices have increased by £8,856 or 5.7%. This percentage increase is marginally lower than last month by 0.1%.
Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, said: “You can’t walk down the street without feeling the force of the independence debate. But on the surface, July’s figures point to a strangely serene Scottish housing market that was not yet expecting such a close-fought storm.
“A favourable lending environment boosted demand over the summer. There were 9,285 transactions in July, climbing 5% up from June to reach the highest monthly total since July 2008. And this propelled prices to new peaks in July in some of Scotland’s centres of employment. Aberdeenshire and Edinburgh have seen transactions soar 20% and 25% respectively over the past year. But on the other side of the coin, uncertainty is leaving its trace – and squeezing supply has seen slower overall transactions growth compared to last year.
“Higher up the chain any prospective sellers with the luxury of time are hanging on to see which way the tide turns before they put their home on the market. However, depending on the outcome of the referendum this could reverse rapidly. There is a chance of a mass take-off and sale of investments, which would disrupt house prices in the short-term. Scotland’s housing market recovery is still in the delicate stages of rehabilitation, and the number of completed sales in the last twelve months still only represents 70% of the average over the period 2004-2007. Ambiguity surrounding Scotland’s future isn’t helping. We are in the throes of the longest period of sustained monthly house price growth since February 2007, but only time will tell whether this recovery will be derailed.
“A Yes vote would usher in a further 16 months of uncertainty. A Scotland outside the UK would open the floodgates to the real questions of currency, exchange rates, mortgage risk, and property taxation. Many mortgage holders could see their LTV shoot up as the implications of borrowing from a bank in a foreign country are unmasked. A No vote doesn’t guarantee clarity either – but the mist of ambiguity would clear sooner.”
