No recovery in Scottish housing market

Nia Williams

November 16, 2012

This means that on an annual underlying basis Scottish house prices have fallen by 0.3%.

The average Scottish house price is now £155,188 and Scottish house prices are 90% of their peak at the beginning of 2008.

Once again, the latest house price movement has been generated from a market with a low number of transactions. Compared to the previous quarter, the number of transactions in the Monitor is down by 26% and by 11% when compared to the same quarter one year ago. Prices continue to show volatility as a result.

For the market as a whole, Scottish house purchases during the third quarter of 2012 showed a fall of 2.1% on the same quarter of last year. For the month of September, the number of transactions fell by 7.7% compared to the same month in 2011.

Donald MacRae, chief economist, Lloyds TSB Scotland, said: “The Scottish housing market had adjusted to the recession with a halving of sales and a period of price volatility. The previous Monitor results showed a pick-up in both activity and prices. However, that pick-up has been reversed in the latest quarter leaving average house prices at 90% of their pre-recession peak.

“Consumer confidence turned negative at the beginning of 2011 and remained negative for 18 months. The latest figure for quarter three this year shows a return to positive territory. However, consumer confidence still remains low and the rate of increase in consumer spending remains modest.

“The pick-up in activity and price of the summer has been reversed with the Scottish housing market expressing low levels of consumer confidence and a return to recession, There are no signs in this latest quarter of any robust recovery in the Scottish housing market but equally no indications of sustained, deep falls in price.”

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