House prices in Scotland have been rising at a faster pace compared to the rest of the UK, according to two separate reports. This trend presents a more favourable outlook for property sellers, especially following the Bank of England’s recent interest rate cut—the first in over four years—which is expected to reduce borrowing costs and boost buyer confidence.
Nationwide’s House Price Index for September recorded a 4.3% year-on-year increase in Scottish house prices for the third quarter, up from a 1.4% rise in the previous quarter. This growth rate is surpassed only by Northern Ireland and northwest England, while the UK average stands at 2.5%.
Additionally, Scottish estate agent Rettie has revised its forecast for Scottish house prices, now expecting a 3% rise this year, up from its previous 1.5% estimate made in December.
John Boyle, head of research at Rettie, told the Times: “There is a greater sense of stability in the market and market rate cuts are reducing costs for consumers. However, Scotland’s housing market performance is still best described as tepid, a lukewarm showing as the market continues to adjust to higher interest and mortgage rates that kicked in during autumn 2022.”
Rettie also anticipates an increase in transaction volumes to about 98,000 this year, compared to 93,000 last year. This suggests a recovering market with more activity expected as interest rates stabilize and consumer confidence potentially increases due to lower borrowing costs.