THE cost of living and rising interest rates might be squeezing finances, but it doesn’t seem to have prompted a slowdown in house price sales yet as latest figures show Scotland’s two main cities have seen an annual increase.


In Edinburgh, house prices have risen by four per cent to an average of £262,300 while in Glasgow there is an even bigger rise of 6.5 per cent with average prices of £139,700.
According to research by property website Zoopla, there is a continued desire to move as a result of the pandemic and flexible working is offsetting the current rise in cost of living and higher mortgage rates, supporting sales in the short term.

Read more: Lonely Planet sign up Scots travel blogger for new guidebook
And it is estimated there could be more than 1.3million sales by the end of the year.
However, demand for homes has slowed over 2022 but remains 25 per cent above average over the last five years and on a par with this time last year
Across the UK as a whole, house prices are up 8.3 per cent year on year with homes averaging £256,000 – a fall from a 9.6 per cent high in March 2022 – yet remain above the five year average of 4.3 per cent.

HeraldScotland: Glasgow saw house prices rise by 6.5 per centGlasgow saw house prices rise by 6.5 per cent
While the immediate aftermath of the pandemic saw a house price rise and fierce competition forcing buyers into closing date bids, property price growth rates are predicted to level out at 5 per cent at the end of 2022.
According to predictions by experts, Scots could also see their energy bills double by next April.
Just days ago utility consultancy BFY Group said they expected the bill cap to reach £3,850 between January and April next year.
Around 1.5m Scots households saw their energy bills soar by up to £693 a year after the energy market regulator Ofgem hiked the price cap by the biggest increase yet in April.
However, the cost of living squeeze and the knock-on effect is not likely to be felt within the housing market until early 2023.
Many recent housing market reports have shown house prices continuing to hit record highs, despite the tough economy.

Read more: Shuggie Bain author Douglas Stuart says Glasgow Cathedral event will be homecoming for Young Mungo
As the cost-of-living crisis tightens its grip, Zoopla said it expects the impacts will ripple through to the property market towards the end of 2022 and into 2023.
Rising mortgage rates are also expected to dent housing market demand.
But Zoopla said that, while demand for homes had slowed this year, it remained above the average when looking across the past five years.
Zoopla’s recent research indicated that changing working habits could help to fuel some demand in the market, with people working from home being particularly likely to have expectations about moving house.
It also suggested that the departure of some older people from the labour market during the coronavirus pandemic might trigger some house moves, with retirement often being a major factor in the decision to downsize and/or relocate.
In some instances, the cost-of-living pressures may be boosting the desire to move, to save on running costs and find better value for money, in turn supporting levels of demand and market activity, the website said.
By the end of the year, house prices are expected to be rising by five per cent annually, according to Zoopla.

HeraldScotland: Edinburgh house prices have increased, but experts are predicting a nationwide drop in the coming monthsEdinburgh house prices have increased, but experts are predicting a nationwide drop in the coming months
It added it expects to see 1.3 million sales completions in 2022 – 100,000 higher than it had forecast.
Richard Donnell, executive director of research at Zoopla, said: “The ongoing impact of the pandemic continues to support a desire to move among home buyers.
“This is a big reason why the market is not slowing as fast as some might expect and demand remains for sensibly-priced homes, especially in more affordable areas.
“The housing market is not immune from higher mortgage rates which we are starting to see increase quickly.
“Buyer interest is expected to slow over the coming months as people tighten their belts and spend with more caution which will see price growth weaken further.
“Buyers will become more wary and it is important sellers are realistic when pricing their homes to sell.”
Richard Davies, MD of estate agent Chestertons, said: “Although we would normally expect the market to slow down towards the summer, we are seeing a continuous uplift in buyer registrations.”