HOUSE prices in Scotland are growing at almost three times the annual rate of England, new figures indicate.
Statistics show the average price of a property in Scotland in May 2019 was £152,801 – an increase of 2.8 per cent on the same time last year.
This compares to a 1% increase in England and a 1.2% average rise across the UK.
However, Aberdeen saw property prices plummet by 4.4%, according to the Office for National Statistics' UK House Price Index, which provides an official snapshot of the market.
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Edwina de Klee, a partner at Edinburgh-based Garrington Property Finders, said the gap between the Scottish and English property markets “is becoming a gulf”.
She said: “At well over double the annual pace of price growth in England, and the UK as a whole, Scotland’s property market is enjoying a moment in the sun.
“Buyers and sellers are responding in kind, with sales volumes in March rising to 5% above the level seen in March 2018.
“But that flurry of activity, and the steady upward trajectory in prices across the nation as a whole, is masking the intense polarisation of Scotland’s local markets.
“Aberdeen retains its unwanted wooden spoon as the city where prices are falling fastest.
“At least the 4.4% decline in the year to May is an improvement on the painful 6.2% fall Aberdeen saw in the 12 months to April.
“Meanwhile at the other end of the scale, prices in North Ayrshire and Stirling are rising at a dizzying pace.
“While England’s average rate of price growth is being dragged down by London’s sharply falling prices, the declines in Aberdeen are being brushed aside by the Scottish market as a whole.
“Across Scotland, buyer demand has strengthened, activity levels are picking up and the traditional spring bounce has turned into a summer surge.”
David Alexander, managing director of the letting and estate agents DJ Alexander, said Scotland was experiencing a “very buoyant market at the moment”.
He added: “The Brexit thing has not affected people up here and they are quite happy to carry on regardless. It just seems like we have a robust market.”
However, he said the impact of devolved property tax had slowed some sections of the market.
In Scotland, all property types showed a rise in average prices in May 2019 when compared with the same month last year.
Semi-detached houses enjoyed the biggest boom, rising by 3.9% to £160,000, while flats and maisonettes increased in price by 1.4% to £110,000.
House prices rose in 23 out of 32 council areas, with the biggest boost seen in North Ayrshire, where prices jumped by 8.2% to £111,000 in the year to May 2019.
Aberdeen saw the biggest fall, with average prices plummeting by 4.4% to £153,000 over the year.
The most expensive place to live in Scotland is Edinburgh, where the average cost of a house is £268,000.
Properties in East Ayrshire come in cheapest, with an average price of £90,000.
Across Scotland, house prices rose by 1.2% between April and May this year, compared to just 0.1% on average across the UK.
The average price of a property in the UK is £229,431, and the north west of England has seen the strongest growth in house prices.
But the cost of a home in London fell by 4.4% over the year to May – the fastest drop since the financial crash.
The Office for National Statistics said there has been a general slowdown in UK house price growth, driven mainly by a sluggish market in the south and east of England.
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It said indicators in the housing market typically fluctuate from month to month, meaning it is important not to put too much weight on one month's figures.
Janet Egdell, accountable officer at the Registers of Scotland, said: “Average prices in Scotland continued their upward trend in May, having increased each month since May 2016, when compared with the same month of the previous year.
“House prices in Scotland were growing faster than the UK annual rate in the year to May 2019. House sales in 2018-19, based on provisional data, were at a similar level to the previous financial year.”
It comes after the latest economic outlook report for PricewaterhouseCoopers (PwC) said the average house price in Scotland is expected to soar to £170,000 over the next four years if a no-deal Brexit is avoided.
However, Mr Alexander previously warned Scotland faces a "property exodus" if Boris Johnson pushes ahead with his reported property tax plans.
Mr Johnson, who is widely expected to be the next Prime Minister, has suggested he wants to cut stamp duty land tax in England to help boost the housing market. His proposals risk opening up a tax gulf with Scotland.
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