MONTHLY house sales in Scotland are up to their highest for five years as the nation experiences a boom in first-time buyers.
A new report by LSL Property Services and researchers Acadametrics showed sales rose by 27% between June and July and predicted a climb in house prices in Scotland. It said first-time buyers were accounting for most of the increase as mortgage companies freed up loans.
However, a separate report from the Office for National Statistics revealed a deepening north-south divide in house prices, with London leaving Scotland far behind.
The latest House Price Index shows Britain's capital has scored the biggest regional annual house price rise with almost 10% in July, while Scotland suffered the biggest dip, dropping by 2%.
A typical house in London is now worth £438,000, nearly two-and-half times the average home in Scotland, which is valued at £182,000.
The ONS said: "House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average.
"The year-on-year increase reflected growth of 3.7% in England and 1.8% in Northern Ireland, offset by falls of 2% in Scotland and 0.7% in Wales."
Last week, the Royal Institution of Chartered Surveyors (Rics) suggested a 5% cap should be placed on annual house price growth to stop any future boom and bust and borrowers taking on too much debt for fear of missing out.
As well as the rise in sales, the LSL/Academetrics report said house prices in Scotland increased month-on-month for the first time in four months in July, rising by 0.3%, and that it could be the start of a prolonged period of house price increases.
The biggest price rises were in the Shetlands (6.7%), East Lothian (3.4%), Perth and Kinross (2.8%) and Clackmannanshire (2.7%).
Alan Penman, director of Walker Fraser Steele, the chartered surveyors which are part of LSL Property Services, said: "Sales have been increasing, and confidence is gradually seeping back in to the market. First-time buyer lending was at its highest since 2007 in the second quarter of the year, which has driven sales up to their highest in five years.
"The improvement is down to a significant improvement in the availability of high loan-to-value mortgages. Banks are more willing to extend an olive branch to borrowers with small deposits, which has opened the door to thousands who were previously locked out of the housing market.
"The improvement looks like it should be long-lived. The economy is brightening by the day, and confidence is spreading quickly. It's up to the Scottish Government to continue to help first time buyers as they are the key to healthy, long term recovery."
Registers of Scotland data showed that there were 8833 property transactions in July, an increase of 1,873 properties over the number sold in June.
Dr Peter Williams, housing market specialist and chairman of Acadametrics, said the rise was exceptional. He pointed out that the number of homes sold in July was 21% more than the previous July.
According to the Council of Mortgage Lenders first-time buyers in Scotland took out 6500 loans in the second quarter of 2013, up 33% over the same period last year and the largest total in a single quarter since mid-2008.
According to CML the number of home movers rose by 5% in the second quarter of 2013 in Scotland, with 8100 loans advanced.
Dr Williams said: "Momentum has been building both within the economy and the housing market, albeit from a low base."
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