The slight rise in the average house price to £159,217 over the last six months, offering encouraging signs of recovery from the recession, has now started fall back, the Scottish House Price Monitor has found.
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Its index, published by Lloyds TSB Scotland, recorded an annual 0.8% rise in property prices between July last year and last month, compared to the previous 12 months.
It shows that the spring in the market slowed between May and July, when prices dropped 2.9% when compared with the previous three months.
The Registers of Scotland (ROS) earlier this month released figures that showed the average house price was almost £6000 less than the figure from Lloyds TSB.
It found average selling prices had increased by 5.3% year on year to June and the average selling price was £153,248. It said the market generally was worth more than £500 million more than the previous year.
Professor Donald MacRae, chief economist at Lloyds Banking Group Scotland, said: “The rise in Scottish house prices identified at the end of 2009 and spring of this year has stopped and has partially reversed.
“However, activity has picked up from the low levels of the winter months. It is clear that recovery from recession in the Scottish housing market has paused.
“Consumer confidence is still well below pre-recession levels. Retail sales are increasing at an annual rate of 0.8% in July, indicating weak growth in the economy.”
Despite the fluctuation in house prices, figures from the lender suggest that the housing market continues to gather momentum, with a 20% rise in the number of property purchases between May and July compared to the same period in 2009.
The number of housing sales has increased for four consecutive months from the low point of February this year, it said.
Marie Eckford, managing director of estate agents Countrywide North, gave a cautious welcome to the figures but queried how comprehensive they were, given that Lloyds TSB is just one of many lenders in the Scottish mortgage market.
The data released by the bank today is based on transactions made only by its mortgage customers but no figure was available from the bank to indicate the scale of its business in this area, or the value of the loans taken out.
Ms Eckford said: “I would say that in terms of volumes of sales, we are probably at about 65% of the transactions we were making at the peak in the first half of 2007.
“The market has picked up considerably in terms of volumes and one thing we have noticed is that we are returning to a seasonal market.
“A seasonal market is completely normal and I think it is probably a good sign.”