Brexit vote hits Scottish house prices for second consecutive quarter

House prices in Scotland have fallen for the second quarter in a row, latest figures have revealed.

According to the Halifax House Price Index for the three-months to September, the average Scottish house now costs around £150,000.

The gap between the average cost of a house in Scotland compared to the £214,140 price tag for the average UK home is now at its widest since 2005, the Halifax said.

This means Scotland has now replaced Northern Ireland at the foot of the HPI UK regional house-price table.

The data also suggests the housing market south of the border has cooled in the wake of the UK vote to leave the European Union.

UK house prices suffered their first quarterly fall in four years at a rate of decline that was the fastest in over five, the Halifax reported.

The building society said the cost of the average house in the UK had fallen 0.5 per cent since the vote for Brexit at the end of June. In contrast, the second quarter saw 1.6 per cent growth.

Prices fell in five of the 12 regions.

Yorkshire and Humber recorded the steepest fall of 3.9 per cent in the quarter while London was the only area of the UK other than Scotland to see successive drops.

Chris Williamson, chief business economist at IHS Markit, who compile the HPI data, said: “The UK’s vote to leave the EU has been accompanied by a clear cooling of the housing market.

“This time, it’s ‘Brexit’ rather than ‘Grexit’ that has caused anxiety to spike in the housing market, so the future trajectory of prices will be very much determined by which path the Government decides to choose in taking the country away from the EU, and how bumpy the negotiating route is.”

He added: “Any negative impact from Brexit worries will be mitigated by strong fundamentals, including a shortage of housing, high employment and record low interest rates, but IHS Markit’s base scenario is one whereby prices fall by three per cent in 2017.”

Conversely, the latest survey of its members from the Royal Institution of Chartered Surveyors in Scotland (RICS) found the number of surveyors reporting price rises had increased by a third on the previous month.

The number of surveyors predicting future price rises also increased, with 14 per cent more saying there will be an upward curve during the next three months.

Thomas Baird, of Select Surveyors, Glasgow, said: “There was a slowdown in Home Report instructions for September, which is indicative of the lack of housing stock coming on to the market.

“Interest from new buyers in Scotland also fell over the month, with 16 per cent more respondents reporting a decrease in enquiries.”

Simon Rubinsohn, RICS chief economist, added: “The UK market does now appear to be settling down following the significant headwinds encountered through the spring and summer.

“Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market, which has been evident in Scotland over the last year. Although this is not a new story, it is a significant one having ramifications for both prices and the level of turnover.”

Share icon
Share this article: