House price growth shows signs of easing
- Published
The sharply rising cost of buying a home in Scotland has eased to 6.3% in the year to April.
The average price was £161,400, falling by £7,000 from the level reached in March.
Official statistics show a cut in annual house price inflation from the year to March, when it reached 11.7%.
March was the last month for a temporary cut in Land and Buildings Transaction Tax in Scotland, reducing tax bills by up to £2,100.
In the private rental market, Scottish rents increased by 1.3% in the 12 months to May, up from 1.1% in the 12 months to April 2021.
Scotland's rental growth passed England's growth in May 2021, having been the weakest in the UK since August 2016.
The rate of house price inflation in England ran at 8.9%, down from 9.9%. That high level has been partly fuelled by a continuing stimulus from a temporary transactions tax cut.
That also affects transactions in Northern Ireland. It was due to end at the end of March, but on 3 March, the Chancellor extended it to June.
The average English home sold for £268,000, reflecting high prices in London and the south-east, though London, with an average price of £492,000, has had some of the lowest price inflation for five consecutive months.
Welsh house price inflation reached 15.6% and in Northern Ireland, it was 6%.
Pent-up demand
House price inflation increased in the latter half of last year, reflecting pent-up demand from the spring months when the market was shut down.
There is evidence of buyers wanting to move to bigger homes, with more space and gardens, following their experience during lockdown.
Prices have also been inflated by competition between lenders for mortgage business, and by increased saving for deposits while people have not been able to spend income on hospitality or travel, and many have avoided the costs of commuting.
In the most recent figures, based on actual transactions reported through Registers of Scotland, the cost of flats in Scotland rose by 7.8%, and house prices by less than 6%. The lowest increases were for semi-detached homes.
First-time buyers paid 6.5% more, on average, than in April last year, reaching £130,200.
There was considerable variation across council areas. Mainland areas which have the hottest property markets include South Ayrshire, Dundee, Glasgow and Inverclyde, up by at least 13%, while the average Aberdeen price fell by less than 1%.
In the islands, there are smaller numbers of transactions. Orkney registered a big increase in average sale price, while it fell slightly in na h-Eileanan Siar.