Average house prices in Scotland fell sharply over the past three months in a sign that the downturn is finally taking hold north of the border.
Average house prices in Scotland fell sharply over the past three months in a sign that the downturn is finally taking hold north of the border.
The Nationwide survey said the average value of a property sold in Scotland between July and September was £141,657, representing a fall of 7.1% on the same period last year.
Fionnuala Earley, Nationwide's chief economist, said: "There is evidence that the relative resilience of Scottish house prices is beginning to fade.
"Scotland had been performing relatively better than the rest of the UK through the second quarter of 2008, when it was the only UK region to still achieve positive year-on-year house growth.
"However, house prices north of the border have now also taken a more decisive turn south."
UK wide, the index fell by its highest amount since it was first published in 1952. The average UK home is worth £165,188.
Some experts said the decrease in the Nationwide house price index, which gives a snapshot of mortgages for properties approved by the building society, should be treated with caution.
Nationwide could not confirm yesterday how many Scottish customers were represented, but figures from the Council of Mortgage Lenders Scotland show the number of mortgages in Scotland was down by around 10,000 at the end of June this year compared with the same period in 2007.
Crawford McCaughie, chairman of the organisation, said he was cautious of the Nationwide figures in the current climate. "There are not a lot of properties selling just now so in light of that you have to question how easy it is to judge the market," he said.
"It is almost futile to assess the market in the short-to-medium term. My own view is that Scotland has not been immune to reductions in house price figures, but has not been badly affected as the rest of the UK and there are still hotspots in the market."
A regional breakdown of house prices shows that over the past three months, house prices in Renfrewshire and Inverclyde have suffered the most, with a 10% drop in value to £153,279. Dunbartonshire and North Lanarkshire were also hit hard, with an 8% decrease to just under £143,500. Glasgow also experienced an 8% drop in value.
Properties in Edinburgh city are still the most expensive with an average value just shy of £250,000, but the capital took a 3% drop on house prices. Aberdeen City, the country's second-richest property hotspot, suffered a 7% decrease, leaving the average property value at £219,879.
Tony Perriam, sales director of Rettie and Co in Edinburgh, described the picture painted by the Nationwide index as "remarkably accurate".
He added: "I think they echo the sentiments that we are experiencing on the ground. The Scottish market has been resilient.
"If the cracks in the Scottish housing market were starting to show a year ago, about the time of the Northern Rock episode, then I think we are feeling a delayed reaction north of the border."
Michael Miller, sales director of Countrywide Properties in Glasgow, said that his company had recorded a drop in property prices, but that the number of sales had gone up in the past month as vendors "readjust their expectations" and settle for a lower price on their home as part of a wider exercise in managing the "market dynamics".
"Yes, I have seen the recorded house price drop, but it is down to an increase in the vendors having a better understanding of current market dynamics and how they can sell their home at the current time," he said.
"Vendors have not been forced to accept this lower figure but clients are choosing to realign their price because they have a motivation to sell.
"Somebody who is taking a 5% drop on property valued at £200,000 will potentially have lost £10,000, but then if they are buying a home worth £400,000 which has dropped in price by 10%, they are potentially saving £20,000. Some people are finding themselves better off."
A further distinctive feature of the last quarter, recorded in the Nationwide index, has been the acceleration of house price falls across the southern regions of England relative to the north of the country. Of six regions bearing a double-digit price decline, four are located in the south. The largest falls in property values in England were in the south-west and East Anglia, which shared an 11.4% annual decline.
Northern Ireland, out of all the regions, showed the biggest dip in house values on the Nationwide index. It recorded a 30% drop but the building society stressed that the figures should be viewed in context of a "staggering" 90% increase in values experienced in the province between 2005 and 2007.
