House prices in Scotland increased by 0.4% year-on-year in February, the first increase in annual prices since November 2023, Walker Fraser Steele has found.

In the chartered surveyors’ house price index (HPI), it revealed that the average Scottish house price in February, stood at £220,736.

The HPI also found that annual prices increased in 18 local authorities, with the Inverclyde region recording an increase of 11.4% year-on-year. Other regions to record notable increases in yearly house prices were Na h-Eileanan Siar (7.2%) and Clackmannshire (6.5%).

However, house prices dropped on a monthly basis by 0.2% between January and February, falling by around £400. This followed the trend of declining monthly changes, with September 2023 being the last month to see a monthly increase in house prices.

Furthermore, transactions continued to remain low, with Walker Fraser Steele pointing towards affordability issues as the main reason. In 2023, sales amounted to around 91,500 properties, which is the lowest annual total since 2013.

Sales in February 2024 look like they will be marginally higher than in 2023, but Walker Fraser Steele said that registrations for the month are still being processed by Registers of Scotland, so a clearer picture is expected in the March results.

Regional development director at Walker Fraser Steele, Scott Jack, said: "Of note is the fact that this is the fifth monthly fall in prices in a row, but given just how many headwinds the market and homebuyers have faced, the total reduction in prices – since they peaked in June 2023 at £223,800 – only amounts to £3,000, or 1.4%.

"Housing remains remarkably resilient and we are also expecting some of the better market news of recent weeks may positively impact pricing in the coming months. Mortgage approvals across the UK are up 39% compared to the same period last year and this should feed into better completion figures and support prices.

"The signs of improvement are already there with 18 local authority areas seeing prices rise in February – two more than in the previous month. Notably Edinburgh also saw prices rise in February. It’s also worth noting that on an annual basis, Scotland’s rate of growth turned positive in February 2024, up by £920, or 0.4% from one year earlier."

---