The latest House Price Index published by Fraser Walker Steele has revealed that the monthly change in house prices rose by 0.4%, signalling a 7.7% annual rise.
The index also revealed that transaction levels increased by 11% on 2019 levels.

Fraser Walker Steele indicated that the number of homes that were purchased at a price of £750k or higher has reduced from a peak of 127 - which occurred in September 2021 - and amounted to 74 such properties in December, although this number is likely to rise as further purchases are processed by Registers of Scotland during this next month.

Even though the annual rate of price growth has started to slow, prices are continuing to rise, with 31 of the 32 Local Authority areas recording rising prices over the last twelve months.

Scotland has ended the year on a new high of £213,646, which contrasts with a value of £198,384 at the start of the year - December 2020 being the last month in which Scotland’s average house price was below the £200,000 threshold.

The index has revealed that there have been 1,088 sales in excess of £750k during 2021, and the firm anticipates that there will be at least a further 26 additional sales in December 2021, not yet recorded by the Registers of Scotland and hence not included in the above total. Sales of high-value properties in 2021 will therefore likely reach 1,100 in number, once RoS updates its figures, which are due to be published at the end of February. Hence annual transactions of £750k or higher in 2021 will likely be double those in 2018 and 70% higher than in 2020.

The reasons for this dramatic increase in top-end sales in 2021 are, as previously discussed, partly to do with the change in preference for larger properties. Home movers were thus encouraged to look for premises which better suited their updated needs.

But additionally, Fraser Walker Steele has pointed to the record low interest rates, which made the purchase of a top-end property more affordable, as well as the tax savings associated with the LBTT holiday, available up to the end of March 2021. This encouraged the whole market to be more adventurous in its outlook.

However, even with the additional 26 as yet unrecorded sales being taken into account, December 2021 will be the third month in a row in which the number of homes purchased with a value of £750k or higher will be lower than that recorded in the same month of the previous year.

For the record, the five areas with the highest number of sales of £750k or above in 2021 were (with the number of high-value sales in brackets):- City of Edinburgh (547); Glasgow City (90); East Lothian (61); Fife (41); and Perth and Kinross (41).

Alan Penman, business development manager at Walker Fraser Steele, commented: “This can only be described as an exceptional annual performance with thirty-one of the thirty-two Local Authority areas in the country recording rising prices over the last twelve months. Though we can see from our data that the annual rate of price growth has begun to slow in pace, house prices continue to rise ending the year on a new high of £213,646.

“When we look back at the start of the year, this figure is in stark contrast with the average value of £198,384. It is incredible to think that December 2020 was the last month in which Scotland’s average house price was below £200,000.

“When you step back, as we have in this report, and cast your eye over what has happened to house prices in the last 10 years in Scotland, the percentage rise in Scotland’s average house price is some 38%.

“The last five years accounts for most of this growth and in particular the pandemic period when the demand for bigger properties to accommodate post-pandemic working and living needs and the lack of suitable stock have supported growth. The Lothians have benefitted most with Edinburgh’s commuter belt experiencing considerable activity during the pandemic as buyers seek plenty of space outside the city centre, but within reasonable commuting distance.”