Average house prices in Scotland increased by 0.3% in October, according to the latest Walker Fraser Steele house price index.

The price rise in October follows a decrease in prices of £100 in September and £240 in August.

These two months were the first reductions in Scotland’s average house price since June 2021.

Demand for properties remained significant in October, with the average house price in Scotland rising to £224,593, representing a new record level.

Over the 12 months to the end of October, prices have risen by some £14,100, or 6.7%.

Although the annual growth rate marginally increased in October, up 0.2% on September’s 6.5%, the growth rate has reduced from June’s 10.4%.

However, prices continued to climb in October at a reduced rate compared to June, with Scotland setting another record average house price of £224,593 in the month for the eighth time this calendar year.

On a monthly basis, 18 of the 32 local authority areas in Scotland experienced price rises, which is two more than the 16 seen in September.

Of the 18 local authorities with price rises in the month, 12 are in the top 16 areas when ranked by price, with only six being in the lower half of the market.

Higher-priced areas in Scotland were more likely to see prices continue to increase in the month, with the lower-priced areas seeing house prices fall.

The largest increase in average prices on the mainland in October was in Clackmannanshire, up by 5.4%.

On an annual basis, 29 of the 32 local authority areas in Scotland saw their average prices rise over the levels seen 12 months earlier, the same number as in September.

The three areas where values fell over the year were, in descending order, Stirling (-5.8%), Aberdeen City (-5.1%) and Inverclyde (-0.2%).

The area with the highest annual increase in average house prices in October 2022 was the Orkney Islands, where values have risen by 24.9% over the year.

However, the Islands frequently have the largest movement in average house prices due to the small number of transactions that take place each month, with just 18 sales in the Orkney Islands in October.

On the mainland, the authority with the highest increase over the year, for the second month running, was East Ayrshire, at 14.9%.

Walker Fraser Steele regional development director Scott Jack comments: “The housing market across the UK has endured a tumultuous time over the past couple of months and yet – notwithstanding the stresses it has been under – our data reveals that average house prices in Scotland in October rose by some £700, or by 0.3%.”

“We think two things have influenced this figure. Firstly, the lack of supply of the right kind of properties, those with more space for working and living from home, persists which supports the average price in general. This continued demand has to a degree provided some protection from the more challenging economic turmoil in September.”

“But there is another factor to consider. Current buyers who secured finance before the financial markets’ turbulence in September stayed the course to see through their purchases.”

“Our sales data from the property purchases recorded by the Office for National Statistics uses the date that a purchaser takes ownership – so decisions to buy made in August and early September, for example, may be coming through in October.”

“We can be confident that many buyers were keen to continue with a purchase agreed before September’s financial chaos, as they almost certainly had been offered favourable mortgage rates by lenders.”

“These two elements in concert have supported demand for properties with the average house price in Scotland rising to £224,593, establishing a new record level. Over the twelve months to the end of October, prices have risen by some £14,100, or 6.7%.”