Residential property prices rose by an average of £3,217 north of the border in April, the latest Your Move’s Scotland House Price Index shows.
After stalling in March, prices in Scotland increased by an average of 1.9%, which is the strongest rate of growth since 2007, taking the average property value to £175,087, according to the data.
Annual house price growth rebounded strongly, rising from 2.2% in March to 3.6% in April, and is now outpacing the 3.5% rate for England and Wales as a whole in the year to April.
Price growth is being fuelled by a widening supply-demand imbalance, most prominently seen in Glasgow, a popular location for first-time buyers, which has experienced the strongest annual growth of any significant market in Scotland over the last year.
“Our figures highlight that whilst average house prices continue to rise, it is first-time buyers who are driving the market as they continue to take advantage of ongoing low interest rates and relatively low deposit requirements,” said Christine Campbell, Your Move managing director in Scotland. “They hold the ‘key to the door’ and as such, are influencing local markets, which is leading to greater balance in prices amongst Scotland’s major cities.”
While it is encouraging to see growing demand from first-time buyers, the government needs to address the fundamental weakness in supply of housing stock in Scotland, according to Alan Penman, business development manager for Walker Fraser Steele.
He commented: “The elections in June should bring new housing policies and initiatives which we hope will bolster Scotland’s market.”