House prices in Scotland increased on average by 2.3% during December 2020, according to the latest Scottish House Price Index from Walker Fraser Steele Chartered Surveyor.

This was an average annual increase of 8.5%.

The average house price in Scotland at £202,170 at the end of December, exceeding £200,000 for the first time ever.

Alan Penman, business development manager at Walker Fraser Steele, said: “The Scottish housing market passed a notable milestone at the end of 2020, as the average property price rose above £200,000 for the first time ever. This new record follows a year of extraordinary growth in the Scottish market – the average price increased by over 8% during the last year and 11% over the last two years.

“The increase in the threshold for the Land and Buildings Transaction Tax (LBTT) played a key role in stimulating the market over 2020. Indeed, the average number of monthly property transactions in 2020 doubled since the measure was introduced in July, though the easing of Coronavirus restrictions may also have played an important part in the increase in activity.

“It’s also worth noting that the economic effects of Coronavirus have not been felt equally and while many Scottish households have struggled financially, some have been able to use the pandemic to bolster their savings. Working from home while cutting out the costs of commuting and socialising has provided an unexpected opportunity for some to save towards a deposit for a property.

“These buyers have also benefited from very low interest rates, which have encouraged many to enter the property market, while also disincentivising saving. The result of this cumulative stimulus has been a record-breaking year for the Scottish property market.”