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Property market shows positive signs for buyers and sellers

ESTATE agents have said the property market "turned the corner" last year and began to pick up from the slump affecting house prices since the start of the economic downturn.

However, experts also warned homeowners should not expect prices to return to their peak any time soon, with little to suggest that a housing 'bubble' is on the horizon. The latest market forecast from estate agents Rettie & Co says there is a positive outlook for people buying and selling homes this year, with the economy and government help to buy schemes spurring transactions.

They predict that the number of homes changing hands will increase from around 82,000 to 87,000, while house prices will go up on average by 3% across Scotland as a whole. It had earlier reported an average property price of £162,000 in Scotland.

However, the firm said that property markets in Scotland's main cities are still well behind their peak in 2007.

In Edinburgh, the market is at only half of its peak 2007 value in real terms, while in Glasgow, it is only one-third of the highs recorded seven years ago. In Aberdeen, where average house prices have risen by 10% since 2012, the market is still 25% down on 2007 levels. The rate of growth in the rented property market is showing signs of slowing as the sales market recovers. The exception is Aberdeen, where rents are up nearly 12% on the year. Rettie & Co predicts rents to grow by 2% in 2014, mainly due to supply shortages.

Meanwhile, the Royal Institute of Chartered Surveyors (RICS) says a revival in house building across Scotland continued towards the end of 2013.

The latest RICS Construction Market Survey found that more than half their members expect a bigger workload this year while also predicting employment levels and company profits to increase.

However, RICS members said that the construction industry was being hampered, with more than a quarter claiming that a lack of quantity surveyors is restricting building projects.

The survey found the number of surveyors reporting problems finding people with the skills they need is at its highest level for five years. Sarah Speirs, director of RICS Scotland, said: "With the economic outlook looking more positive in recent months, it would seem that the construction industry has followed suit and activity is up right across Scotland.

"More homes are being built, the investment in infrastructure is being recognised and workloads for the next year look positive.

"There is a long was to go for the industry to regain traction and concerns regarding skills need to be addressed, however, these figures show welcome progression."

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