A change in working habits and a limited number of properties on the market continues to feed the growing market, with the annual rate of house price growth in Scotland sitting at 9.2% in February.
The Halifax House Price Index also showed a growth across the UK with house prices increasing at the fastest annual pace since 2007 with property values increasing on average by 0.5% month-on-month.
Graham Blair, Mortgages Director, Bank of Scotland, said: “The Scottish property market continues to perform strongly, with average house prices now at a record high.
“Two years on from the start of the pandemic, average property values have now risen by £23,575 (+14%) since February 2020.
“This has been driven in part by the ‘race for space’ as buyers seek bigger properties further from urban centres, reflecting the change to lifestyles brought about by increased home working and a desire for more room.
“Higher property values also continue to be underpinned by the limited supply of properties being listed for sale.
“Looking ahead, much like the rest of the UK, the rise in the cost of living will likely squeeze already stretched household incomes. This is expected to weigh on the market, with activity likely to return to more normal levels and an easing of house price growth to be expected.”
Across the UK, the average house price across the UK was a new record high of £278,123, however, the cost of living and the conflict in Ukraine could also dampen the property market.
Russell Galley, managing director, Halifax, said: “The UK housing market shrugged off a slightly slower start to the year with average property prices rising by another 0.5% in February, or £1,478.
“This was an eighth successive month of house price growth, as the resilience which has typified the market throughout the pandemic shows little sign of easing.
“Year-on-year prices grew by 10.8%, the fastest pace of annual growth since June 2007, pushing the average house price up to another record high of £278,123.
He continued: “Looking ahead, as Covid moves into an endemic phase and almost all domestic restrictions are removed, geopolitical events expose the UK to new sources of uncertainty.
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“The war in Ukraine is a human tragedy, but it is also likely to have effects on confidence, trade and global supply chains.
“Surging oil and gas prices are one immediate consequence, meaning that inflation in the UK – already at a 30-year peak – will remain higher for longer.
“This will add to the squeeze on already stretched household incomes. While increases in bank rate (the Bank of England base rate) look likely in the near term, the extent of the rises will depend on how it affects prices and companies’ approaches to pay over the months to come.
“These factors are likely to weigh on buyer demand as the year progresses, with market activity likely to return to more normal levels and an easing of house price growth to be expected.”
Here are average house prices across the UK in February according to Halifax, and the annual increase:
– East Midlands, £228,289, 11.6%
– Eastern England, £325,687, 11.4%
– London, £530,469, 5.4%
– North East England, £160,874, 9.9%
– North West England, £212,920, 11.1%
– Northern Ireland, £173,911, 13.1%
– Scotland, £193,777, 9.2%
– South East England, £378,441, 10.5%
– South West England, £293,968, 13.4%
– Wales, £207,184, 13.8%
– West Midlands, £234,481, 9.7%
– Yorkshire and the Humber, £192,010, 9.8%
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.