Property website Zoopla has reported house prices in the UK rose by nearly £7,000 on average between January and June 2015. As a direct impact of a lack of properties entering the housing market, house prices in Scotland rose by 3.5% between April and June and are expected to rise by over 5% by the end of the year.
The biggest increase in house prices concerned semi-detached properties, with their value showing a 5.5% increase. Excluding flats, all other types of residential property displayed a decrease in volume of sales. Detached properties, the only type of property not to increase in average house price, had a drop in sales of 4.2% compared to 2014.
Out of all cities in Scotland, Glasgow had the largest rise in percentage of sales, with an increase of 17.6%. Aberdeen however, had the largest decrease in sales, with an 18% decline since 2014. The decline in sales in Aberdeen has coincided with the loss of jobs in the oil and gas sector affecting the area.
Sarah Speirs, director of RICS in Scotland, who work closely with the Scottish Government on matters relating to property and construction predicted a rise in rent and commented,
‘The Scottish government increases investment in initiatives such as Help to Buy, which further stimulates demand while failing to address the critical issue of housing supply, more needs to be done to increase and expand housing supply.’
In an attempt to address housing issues and focus on the affordability of Scottish house prices, the Scottish government has announced it will spend £195 million of the next three years on a shared equity scheme designed to help people buy new-build houses.
The cutbacks in companies are affecting how much people can spend on buying a home and their decisions to sell their properties. People are reluctant to move home in case there is a change to their financial circumstances. This fear is fuelled by mass redundancies across many sectors. Most recently, Scotland was rocked by the confirmation that two steelworks are to be closed due to the pressure put on them by competition outside of Europe. This move may ultimately spell the end of Scottish steel production for the long term.
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