News Review: Scotland


Scotland tops long term house price gains by


Martin Ellis, head of housing


economics, Halifax


regional differences in house prices never fail to command attention. Whether it’s analysing the north- South divide or discussing the general outperformance of the London market – digging beyond the headline national number can paint an interesting picture. in our latest research, we’ve analysed regional house prices according to average price per square metre. this proves to be a really useful measure for house price comparison. after all, a local market is characterised by the types of property, and the size of those properties, that are available. this allows us to compare on a very basic like for like basis.


Long term growth We always testify that looking at house prices over a longer term is always a more reliable and clearer measure of house price performance. as part of the research, we reviewed the price growth over the last ten years on a per square metre basis. the highest performing towns announced in this year’s report reveal a huge concentration in Scotland. the top four towns across the uK are all in Scotland, and another two appear in the top ten. Peterhead, the easternmost


point of mainland Scotland, recorded the largest gain in average price per square metre (m²) over the last


decade. the aberdeenshire town has seen a significant increase of 160% to £1,254 per m² in 2011 from £481 per m2 ten years ago. the market town of inverurie, also in aberdeenshire, has experienced the second largest gain in the uK (142%) since 2001 followed by the coastal town of montrose (135%).


Black gold effect one key point to note is that many of these towns actually had relatively low prices in 2001, making their increase over the decade even more stark. What’s very clear in Scotland is the impact of the wider economy on house prices. the appearance of so many towns in aberdeenshire in the top performing towns is result of the strong performance of the oil sector and subsequent stimulation in the local economy. a further interesting quirk


to the figures demonstrates how aberdeenshire in particular is outperforming the rest of the uK since the credit crunch. of 467 towns, just 12 have recorded an increase in price per squared metre since 2007 – including Peterhead (7%) and inverurie (10%). the other high performers over the last three years feature the usual house price anomalies of Westminster and islington – demonstrating how the performance of the aberdeenshire towns really has stood out. in terms of today’s house it’s unsurprising


prices,


that the top ten remains exclusively London borough, with Kensington and chelsea topping the bill. at £8,038


16 mortgage introducer NOVEMBER 2011


per square metre, it provides some context for the £1,254 cost in Peterhead – despite the aberdeenshire town’s phenomenal performance since 2001.


Capital performance the Scottish


capital


edinburgh is the most expensive town north of the border, with an average price of £2,101 per m2 in 2011. demonstrating the huge scope of the Scottish market, this is more than twice that in the least expensive town, Lochgelly (£911 per m2). aberdeen is the second most expensive with an average price of £1,958 per m2. Helensburgh (51%) and


coatbridge (59%) are the two Scottish towns that recorded the smallest price gains on a per square metre basis over the last decade, still outperforming the uK where the smallest increase was 25% in Belfast (25%).


Million pound market at the other end of the market, we have also reviewed the number of million pound properties in Scotland. So far this year, 60 properties have been sold for more than £1m, compared to 90 in the whole of 2008. the figures demonstrate that the top end of the market has significantly outperformed the rest of the Scottish residential market. However, the impact on the wider market is minimal given that these sales account for just 0.2% of the whole market. this is in comparison to a 1.1% share for million plus properties south of the border.


Predictably, edinburgh


is home to nearly half of all the million pound homes sold in Scotland in the first six months of this year. Significantly, the Scottish capital also recorded the highest number of million pound sales outside of the south of england, and is the most expensive city outside southern england with an average house price of £206,303. there are areas in Scotland


where house prices have historically been higher than surrounding areas. glasgow, for instance, has an average house price 22% above the county premium. However, a substantial portion of our research this year demonstrates that there are numerous areas of growth in Scotland rising from a comparatively low house price base.


inverness, for


instance, has seen the highest 10 year house price growth across all cities in the uK, increasing 148% from £68,141 in 2001 to £169,257 in 2011. aberdeen is not far behind with a 116% increase over the last decade, the fourth highest city increase in the uK.


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