Call to boost supply as average house price jumps 4.6 per cent

Registers of ScotlandThe average price of a house in Scotland rose by 4.6 per cent in June compared to last year, according to statistics from Registers of Scotland.

The latest figures from the UK house price index (UK HPI) showed prices have risen to £143,282, 2.7 per cent higher than May.

Edinburgh had the largest increase over the last year, where the average price increased by 11.7 per cent to £240,978.

This compares with a UK average of £213,927, which rose by 8.7 per cent year-on-year and is up by 1 per cent from May.

The biggest house price decrease in Scotland was seen in Aberdeen, where prices fell by 6.8 per cent to £178,069.

Despite average prices increasing across Scotland, the volume of residential sales slumped by 16 per cent. The April sales figure was 6,665, significantly lower than the March sales figure of 11,017.

Sale volume figures for May and June have not been included in the latest report due to the time taken between completion and registration of sales.

The contrast between March and April has been attributed to changes in land and buildings transaction tax which came into effect on 1 April, under which those purchasing buy-to-let properties must pay additional tax.

Nicola Barclay
Nicola Barclay

Responding to the statistics, industry body Homes for Scotland said that such upward pressure would continue as long as demand continued to outstrip supply, pushing home ownership beyond the grasp of many desperately trying to get onto the housing ladder.

Chief executive, Nicola Barclay, also expressed concern over the 16 per cent drop in the volume of residential sales in April 2016 compared with 2015.

Nicola Barclay said: “Whilst this decrease in the number of residential sales may in part be a consequence of the new 3 per cent Land & Buildings Transaction Tax supplement on additional homes, the news follows the recently reported drop in vital private sector construction for 2015 and demonstrates that we still have a long way to go before we return to the productivity levels that we need to significantly increase supply.

“Given that the single most effective way to address affordability concerns is to increase the supply of new homes of all tenures, we are calling on the Scottish Government to prioritise housing when allocating its recently announced infrastructure funding, in a move that would also boost jobs and the economy.”

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