Scottish house prices fell by the largest amount in 10 years during January, according to the latest Walker Fraser Steele Acadata House Price Index (Scotland).

The average house price in Scotland fell by 0.9% in the first month of 2023, taking the rate of annual growth down to 4.6%.

Annual house price growth in Scotland peaked at 10.4% last June, but a flurry of decreases have left the average Scottish house price sitting at £222,668.

Regional development director at Walker Fraser Steele, Scott Jack, suggested the index is showing a “conflation of factors” that have resulted in this fall.

“The headline figures this month mark the first real change in direction for house price growth in Scotland since 2012,” Jack said.

“On a purely seasonal note, January and February are traditionally slower months for housing transactions in Scotland – partly as a result of estate agency Christmas closures and reduced daylight hours for viewings.”

Jack also suggested that a fall in the average house price was “perhaps inevitable”, following the sudden rise in the cost of mortgage finance and the economic turmoil brought about by Liz Truss and Kwasi Kwarteng’s mini-Budget.

However, he did also note that a fall in the average has not meant a fall across all property types.

“If we look beyond the headline average house price fall of 0.9%, we can see how the varied types of property stock fared differently over the month,” Jack added. “During January it was the price of flats that fell the most, by 2.0%, followed by terraces, down by 1.6%, and semi-detached properties down by 0.6%.

“Meanwhile, the average price of detached homes remained steady during the month, with 0.0% price change. This is less surprising in so far as the more expensive detached properties tend to attract wealthier and more resilient buyers who are less impacted by the rising cost of mortgage finance.

“So, the average house price fall requires some perspective. We need to remember that in spite of the fall, the current average house price still remains some £9,700, or 4.6%, above the average price of 12 months earlier.”

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