The analysis from property website home.co.uk says that the average asking price for a home in England and Wales has increased by 4.3% over the same period.
It explains that Scottish house prices soared during the last property boom. Between October 2005 and the October 2007 peak, the mix adjusted average rose by 35.2%. During the same period, home asking prices in England and Wales rose by only 5.1%, as most regional markets, especially the South, had already overheated at this stage in the boom bust cycle.
‘Hence, as is often the case, the last to rise has the furthest to fall. By October 2009, Scottish property prices had fallen by 13.7% and it is arguable that they would have fallen much further had the Bank of England not set ultra low interest rates earlier the same year,’ it suggests.
‘On the upside, lower SVRs meant fewer defaults and fewer repossessions, but on the downside, home prices remained artificially high and market stagnation took hold,’ the report adds.
It also looks at the trend over the last seven years in terms of the time properties have spent on the market waiting to be sold. Scotland had the lowest typical time on the market in the UK, even lower than London, during the boom and then properties soon piled up when the financial crisis hit and the market stagnated.
‘Overall, despite the Help to Buy scheme, Scottish time on the market figures remain among the worst in the UK, showing that more normal market momentum has yet to return to most of the country,’ the report explains.
However, there are always local exceptions. One location in particular where the market is functioning very well and properties are selling quickly is Aberdeen. The property market in the city has seen a turnaround in 2013. Buyer demand soared, clearing the backlog of properties and the city now has the lowest time to sell in the whole of the UK.
‘Consequently, prices are rising in Aberdeen, and the city may be regarded as a shining example of how quickly a property market can recover,’ the report adds.
According to Doug Shephard, director of home.co.uk, most of Scotland has a long way to go before the property market finds its feet again. ‘Considering the much improved availability of cheap mortgages and government help to get on the housing ladder, Scottish properties are spending far too long on the market,’ he said.
‘The Scottish market has stagnated because it is clogged up with over priced properties hanging around for six months or longer. Sensibly priced properties are still selling in a reasonable time frame but, unfortunately, they are few and far between,’ he pointed out.
‘while interest rates remain so low and mortgage payments can be met, sellers will not have a sense of urgency and pricing will remain overly optimistic. After all, if it won't sell, the vendor can always turn to the booming rental sector,’ he added.
