David Alexander

The property firm said that average prices have increased by 27.4% since March 2020 when the pandemic began. The increase is in marked contrast to historic rises with the previous 40-month period showing an average rise of 8.9%.

Although the increase has been substantially higher across Scotland as a whole there are enormous geographic differences with both Edinburgh and Glasgow increasing at a much greater rate than much of the rest of the country.

Edinburgh’s average price increase is actually lower at 21.4% for the period from March 2020 to July 2023. In the 40 months prior to this from December 2016 to March 2020 average prices increased by 21.9%.

Glasgow has had the greatest increase of any Scottish city with average prices rising by 33.5% since March 2020 compared with a 14.2% rise in the 40 months to March 2020.

However, since the pandemic there are higher than average price increases in the capital and its surrounding areas with East Lothian recording a 59.7% rise in 40 months; Fife higher by 31.2%; and West Lothian up 29.1%.

David Alexander, chief executive of DJ Alexander Ltd, commented: “These figures show that, despite media concerns that house price increases have slowed in recent months this is actually because they have risen at such an enormous rate since the start of the pandemic. Even without higher interest rates there would have to be a slowing of house prices simply because they have been rising at an unusually high pace.

“The previous 40-month period shows an increase of 8.9% which is much more in line with historic trends. However, these figures also reveal that both Glasgow and Edinburgh have been experiencing much greater price growth than the rest of Scotland for the last seven years indicating demand for these cities is far exceeding supply.

“Indeed, you can see that Edinburgh is creating a ripple effect in the areas surrounding the capital with East Lothian prices rising by an astonishing 59.7% in just under three and a half years. Fife with a rise of nearly a third and West Lothian just under 30%.”

He added: “These were popular areas prior to the pandemic but the desire to live more rurally, with more outdoor space, coupled with easy access to the city is driving prices in these areas to extremely high levels.”

“It is unlikely that these increases can continue in the long term because there must come a point at which affordability issues kick in with average prices already substantially higher than they were even a few years ago. The high levels of employment coupled with rising interest rates means that many homeowners are still able to afford to buy the home of their dreams. There will be a stabilising of prices and a return to lower annual increases, but we may not be at that point just yet and some parts of Scotland remain extremely popular.”