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Scottish house prices climb beyond housing boom highs

Average house prices rose £1,600 (1%) in a month, surpassing May 2008 peak in recovery milestone according to the latest Your Move Scotland House Price Index.

Fife and West Lothian joined the ranks of the record-breakers, setting new peak house prices in January.

Dundee City experienced the biggest price jump in January, with property values soaring 6.7% in a month.

But completed home sales were down 44% since December – double the typical seasonal downturn.

Christine Campbell, regional managing director of Your Move, comments: “As we entered the New Year, we also moved into a new chapter of Scotland’s housing recovery. Thousands of homeowners are finally able to turn their backs on the housing crash, as Scottish house prices break cover from under the clouds of the recession. As of January 2015, the average home in Scotland is now worth £1,238 more than at the peak of the housing boom in May 2008, following hardy annual growth of 4.5% and an energetic boost on a monthly basis at the start of 2015. Property values jumped 1% in January, the most significant monthly upswing we’ve witnessed for seven months, taking the typical house price to a new record high of £166,771. The city of Dundee had the most energetic start to the year, with prices soaring 6.7% (equal to £8,161) during January 2015, in the largest month-on-month increase in Scotland.

“Prices are certainly making sweeping progress across the board, but there are some particularly strong players. In January, Fife and West Lothian joined the ranks of Aberdeenshire and the Shetland Islands and set a new peak house price, following strong annual growth of 9.5% and 10.9% respectively.  However, North Ayrshire has experienced the biggest rise in house prices on the mainland over the last year, up 11.6% – with the typical price of a detached home growing from £180,000 to £210,000 in the past twelve months.

“We may have turned a significant corner in the journey back from the financial crash, but we’re nowhere near the finish line.  Although a minority, average prices have fallen in 7 local authorities of Scotland during the past year. West Dunbartonshire has seen the steepest drop in values in the last twelve months, with prices falling 7.2% on average, and flats in the area are now worth £20,000 less than a year ago.

“In addition, completed house sales in January 2015 were down 44% on December levels. This is double the usual seasonal downturn, and also represents a 14% fall on a year ago, as home sales drop to the lowest level for 23 months.  This shouldn’t be viewed as a bad omen though, as the start of the year is always the slowest time for house purchases in Scotland, and it will only get busier, as the sustained flow of front-end demand flooding into the market starts to translate into end results.

“The Scottish housing market has all the necessary strings in its bow – the economy is moving in the right direction, and employment is on the up, while mortgage rates are at rock bottom.  Next month’s Land and Buildings Transaction Tax will offer some extra relief to those clambering onto the bottom rungs of the ladder, lowering the stamp duty paid on purchases even further, and the greater policy clarity that will emerge after the General Election will unleash a new wave of confidence that will outweigh any hesitancy in the market at the moment.”

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