Gloomy summer for Scots housing market

Reporter

Wednesday 31 October 2012

THE number of house sales in Scotland this summer dropped to fewer than half that recorded during the peak of the property boom, figures have revealed.

SLUMP: House sales in Scotland for the quarter to September were half the total recorded for the same period in 2007-08. Picture: Nick Ponty

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Jody Harrison

A survey by the Registers of Scotland found the gloom that has gripped the housing market since the start of the economic downturn is yet to lift with the average home now worth 2.3% less than it was a year ago.

Just under 20,000 houses were sold between July and September, the lowest number in that quarter for almost a decade.On average, sales dipped by 2.1% during the second quarter of 2012-13 compared with the same period the previous year, with a total of 19,868 homes sold. The average price of a residential property is now £159,310 according to the figures, which cover all sales including those not involving a mortgage.Some experts say uncertainty caused by the referendum on independence is stifling demand, while others believe the market is being held back by fears the worst is not yet past.Registers of Scotland's director of commercial services Kenny Crawford said: "This is the lowest volume of sales in this quarter since records began in 2003 and is fewer than half of the number of properties sold in Scotland when the market was at its peak in 2007-08."The data also showed surprising variations across different regions with some experiencing double-digit growth. Glasgow had the most sales with 2198, although average values dropped by 5.1%. The number of sales in Scotland's largest city was just 15 ahead of Edinburgh – which remains the most expensive place to buy a home in Scotland, followed by East Dunbartonshire and East Lothian. East Dunbartonshire saw a 10.5% rise in sales, alongside an 8% increase in average price, making it one of the strongest performing areas in Scotland.Overall, the biggest rise in house prices could be found in the Orkney Isles, where property prices went up by 16 % from £115,737 to £134,216. The biggest fall in the average value of a home was in Argyll and Bute, where prices were down by 12.7%, from £143,590 to £164,513.However, there was good news for first-time buyers as the drop in average values meant some homes are more affordable. Blair Stewart, national partner at estate agents Strutt & Parker, said its average selling price went up from £725,000 to £745,000 during the period covered by the report, although the number of sales fell. He added: "There is no doubt the tightening of lending regulations has made a huge difference to the market. There is a real challenge in getting money to fund a purchase." Michael Luck, managing director of Slater Hogg and Howison, said: "The good news is that there has to come a point where people come off their perch and begin to buy property again."There are a lot of people in rented accommodation waiting for that 'miracle' purchase to arrive, and sooner or later they will realise its is not coming and that they will have to enter the market."Jamie Macnab, a director at Savills in Edinburgh, who specialises in country houses, said he has had inquiries from people who were "looking but would rather not commit until after the independence vote".He added: "The uncertainty of the vote in itself is going to delay any recovery. Anything delaying the market's return to general prosperity is frustrating."

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Gloomy summer for Scots housing market

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