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Poll uncertainty could hit rising property sales

AN upturn in house sales could slow next year as a result of uncertainty surrounding the independence referendum, according to property experts.

The average house price in Scotland rose £1368 in the 12 months to October, with an increase in first-time buyers boosting the market.

Sales in August, September and October were up 23% on the same period last year, a report by LSL Property Services and Acadata shows.

But Dr Peter Williams, housing market specialist and chairman of consultants Acadata, said predictions for the coming year were difficult due to several "unknowns".

He said: "There is likely to be a period of uncertainty arising from the referendum on independence from the United Kingdom, which takes place in September 2014.

"One factor that tends to unsettle the housing market is such a period of uncertainty, as buyers defer making long-term decisions on property purchase until the perceived uncertainty diminishes. We therefore anticipate that the current expansion of sales in the market will begin to slow in 2014."

Another factor that may affect sales next year is the withdrawal of the Bank of England's Funding for Lending scheme (FLS) for mortgages, he said.

The number of loans taken out by first-time buyers in the third quarter of 2013 was up 32% compared to the same period last year, according to the Council of Mortgage Lenders.

Dr Williams said: "The scheme has had a positive influence in lowering interest rates to the housing sector, enabling first-time buyers to secure loans, which for a number of years had proved elusive.

"As yet it is too early to tell whether there is enough momentum in the market to make the withdrawal of the FLS an irrelevance, or whether its removal will again put the brakes on lending to those who have not managed to save a sufficiently large deposit."

The average home in Scotland was worth £144,084 in October, up 1% from the same time last year.

The highest annual increase on the mainland was in Aberdeen, where prices soared 9.9% over the period. In Edinburgh the average house price dipped 0.7%, while Glasgow saw a 1.9% rise.

Gordon Fowlis, regional managing director of estate agency Your Move, part of LSL Property Services, said the Scottish market is "blossoming".

"Sales are substantially better and prices are entering a period of prosperity, fuelled by rising consumer confidence and demand," he said.

"October is the second consecutive month in which the annual change in prices has been positive, a trend that has not been visible since early 2011. With the easing of mortgage lending conditions, first-time buyers are having a much easier ride.

"So far 2013 is seeing the greatest amount of sales recorded over the last five years. Record low interest rates have sent the market into another realm."

Looking ahead, he said: "The referendum next year on independence from the UK could have an impact on Scotland's housing market. But if investors hold on to see what the effect will be, it may unsettle the market and hamper its ability to create the much needed new housing supply in the meantime."

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