The average house price in Scotland reached a new record level this summer, rising by almost £6,000 in a month.
At the end of July, the average price stood at £207,877 – up by £5,950, or 2.9%, on June.
It is the largest increase in a month since March 2015, just before the Land and Buildings Transaction Tax (LBTT) came in.
Figures revealed in the Walker Fraser Steele Acadata House Price Index for July also showed that 2021 has had the highest number of sales over £750,000 of the past seven years.
Tax holiday
Prices reached a mini-peak in March 2021, immediately prior to the ending of the LBTT tax holiday on 1 April 2021.
The average house price in Scotland has increased by £20,550 – or 11.0% – over the past 12 months to the end of July.
John Tindale, Acadata senior housing analyst, said one of the main reasons for the upward movement is a preference for larger properties with space for home working.
He said: “The demand for larger premises continues to be strong and for some includes moving to Scotland from London or from other major cities in the UK and beyond.”
There were 537 sales in excess of £750,000 during the first seven months of 2021, greater than the first seven months of each of the previous six years.
The expectation for the whole 12 months of 2021 is that high-value sales will be far in excess of all previous years.
Record low interest rates are also making the purchase of a top-end property more affordable.
In July 2021, all bar one of the 32 local authorities saw their average prices rise over the previous 12 months.
The exception was the Western Isles, where only 25 sales took place in July 2020.
The report pointed out that the Scottish Government discouraged buyers from visiting the islands in the early stages of the pandemic so the numbers of transactions were low.
In July there were 12 local authorities which reached a new record in average house prices, up from four in June.
Among them were the Orkney Islands, where the average in July was £192,263, up almost 10% on the previous month and 30% on July last year.
Regional breakdown
In Aberdeenshire the average house price for July was £223,581, up from £212,603 last year.
Aberdeen city had a similar annual percentage increase of 4.1%, up from £189,075 in July 2020 to £196,758 in July 2021.
The Shetlands meanwhile saw an annual increase of almost 26% with the average house price £180,200 in July.
In the Highlands, average house prices fell slightly between June and July, but were up by almost 7.7% annually to £203,491.
The annual increase was almost double that for Moray at 14%, where the average price was £187,629 in July this year.
On the Scottish mainland, the highest annual July increase was in the Borders, up by 23.2%.
Alan Penman, business development manager at Walker Fraser Steele, added: “Sales volumes, which now appear to be running at the levels seen in 2018, also suggest larger properties are supporting higher average prices.
“Lower transactions and strong prices at the top end show that demand is exceeding supply with the focus of the market on higher-value transactions supported by continuing record low interest rates.
“Combined with the previous tax savings associated with the LBTT holiday, these factors have encouraged the whole market to focus on larger properties and give cause to believe the exceptional performance of larger properties might continue for some months to come.”