Scottish housing market continues to recover
In the three months to 31 January 2010, the quarterly price index for the average domestic property in Scotland rose 5.9% on the previous quarter. Following seasonal and mix adjusting, the average Scottish house price rose to £160,074.
Though house prices are now rising once more, on an annual basis, Scottish house prices have fallen by 6.8%. Following four quarterly price falls and now two consecutive quarterly rises, Scottish house prices have regained the level last seen at the end of 2008. However, the number of house purchase transactions is still around half of the levels recorded before the onset of the recession.
All areas continue to report an annual fall in prices ranging from -2.0% in Dundee to -12.1% in Glasgow. Price movements in the latest quarter remain volatile. Detached houses had been showing a trend decline in price every quarter for the last two years. This fall has been reversed with an increase in the latest quarter of 12.6%. This price rise may have been influenced by the ending last year of the temporary lower starting limit for payment of Stamp Duty Land Tax, encouraging purchases before the year end.
Professor Donald MacRae, chief economist, Lloyds Banking Group Scotland, said: “The Scottish economy entered recession in quarter three of 2008 and has since recorded five consecutive quarterly falls in output with possibly a sixth quarterly fall yet to come. However, business surveys point to an exit from recession in early 2010. Consumer confidence has recovered from the low at the end of 2008 but it is still below pre-recession levels. Retail sales are increasing at an annual rate of 4.3%, while the volume of housing sales has recovered from the low point of February 2009.
“The level of mortgage availability including for first-time buyers has increased while the cost of borrowing remains low for many mortgage holders. Although a house price recovery is evident in Scotland, it is based on much reduced levels of activity. Nevertheless, the Scottish housing market is now into recovery.”