The average cost of a Scottish house hits a record high of £203,677 despite a slight drop in inflation

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The average cost of a house in Scotland has hit a record high of over £203,000, despite a slight drop in annual house price inflation according to the latest figures.

The House Price Index (HPI) report revealed that Scotland saw the annual house price inflation rate fall to +9.6% from +9.9%.

However, the average price of a Scottish house sits at £203,677, setting a new record for the country.

Across the UK, the average house price fell in July from a record high the previous month, marking the first month-on-month decline since June last year.

The annual rate of price growth across the country slowed to 11.8% from 12.5% ​​in June.

A typical UK property now costs £293,221.

Wales topped the Halifax chart for annual house price inflation, with prices there rising by 14.7%.

In London, already record property prices were pushed even higher in July.

Russell Galley, Managing Director, Halifax, said: “It is important to note that house prices remain more than £30,000 higher than at the same time last year.

“While we shouldn’t read too much on a single month, especially since the fall is only fractional, a slowdown in annual house price growth has been expected for some time.

“Leading housing market indicators have recently shown slowing activity, while rising borrowing costs are adding to the squeeze on household budgets amid unusually high house price-to-income ratios.

“That said, some of the dynamic market drivers we’ve seen in recent years – such as the extra cash being saved during the pandemic, fundamental changes in the way people use their homes and investment demand – remain evident.

“The extremely limited supply of homes for sale is also a significant long-term challenge, but serves to support high house prices.

“Looking ahead, house prices are likely to come under further pressure as these market tailwinds fade further and the headwinds of rising interest rates and rising costs of living settle more firmly.

“As a result, a slowdown in annual house price inflation still seems the most likely scenario.”

Nicky Stevenson, chief executive of estate agent group Fine & Country, said: “Cheap debt is rapidly disappearing and against this backdrop we can expect to see a dampening effect as purchasing power continues to rise. ‘erode.

“Although the housing market and the wider economy do not always move in tandem, the recession predicted by the Bank of England is bound to have an effect on growth and consumer confidence.”

A package of government cost-of-living support measures are being rolled out in the coming months as households face the prospect of rising bills and falling real incomes for some time to come.

Alice Haine, personal finance analyst at Bestinvest, said: “Once a recession sets in, the threat of job losses will rear its ugly head – damaging buyer confidence and dampening the market in the process.

“The real turning point could be the Bank of England’s decision yesterday to raise interest rates to 1.75%.”

The Bank of England on Thursday raised the base rate by 0.50 percentage points from 1.25% to 1.75%, marking the biggest single rate jump since 1995.

This will add around £50 a month to average follow-on mortgage costs, based on average outstanding balances, according to calculations by trade association UK Finance.

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