Scottish residential property market showing signs of recovery with annual growth of 1%
Scottish house prices have increased by £1,368 since October 2012, an annual change of 1%, with Aberdeen setting a new record high, according to the latest index.
But on a monthly basis prices fell slightly, down 0.1% taking the average house price to £144,084, the LSL/Acadata Scotland House Price Index also shows.
Sales are increasing and over the last three months have been 23% higher than last year. This is a sign that the Scottish housing market is being restored to health, according to Gordon Fowlis, regional managing director of Your Move, an estate agency chain that is part of LSL Property Services.
‘Sales are substantially better and prices are entering a period of prosperity, fuelled by rising consumer confidence and demand. October is the second consecutive month in which the annual change in prices has been positive, a trend that has not been visible since early 2011,’ he said.
‘Average prices have risen £1,368 over the past year in Scotland, while lending levels are improving rapidly as economic conditions perk up as is being seen across the UK. With the easing of mortgage lending conditions, first time buyers are having a much easier ride. There is now a better range of competitively priced products with lower deposit requirements, thanks in part to the backing from the government’s schemes,’ he explained.
He also pointed out that so far 2013 is seeing the greatest amount of sales recorded over the last five years and record low interest rates have sent the market into another realm. ‘Sales have shot up by 23% for the three months of August, September and October 2013 compared to the same period last year. At the bottom end, shoots of first time buyer activity mean the market is blossoming, a factor that’s giving the whole market a lift,’ he said.
‘After a period of slow movement, it is reassuring to see home mover and remortgage lending is also showing a boost in levels. People are now more confident in their plans to sell their current homes and buy somewhere else as signs show the path ahead in 2014 looks stable. The Help to Buy scheme will take on more prominence early next year and will be the main driving force pushing up house price growth and buyer activity,’ he added.
Although some experts have said that the recent news that the Funding for Lending scheme will be axed has created an element of uncertainty, the underlying fact is that the recovery has only just begun. ‘Lending is still only slightly above half the levels seen at the peak of the market, so there is much space for growth. The referendum next year on independence from the UK could have an impact on Scotland’s housing market. But if investors hold on to see what the effect will be, it may unsettle the market and hamper its ability to create the much needed new housing supply in the meantime,’ said Fowlis.