Scottish house prices up £1,648 in 2013
• Sales in Q2 2013 are 7.7% higher than last year
• First-time buyers accounting for a larger percentage of sales
Alan Penman, of Walker Fraser Steele chartered surveyors, part of LSL Property Services, comments: “Scottish house prices have gently taken a tumble in the past three months – the latest figures show prices fell by £627 in June compared to May. But the housing market is bearing up well under a sea of adversity. Prices are down slightly month-on-month, yet they are higher than they were at the start of the year.
“There are some green shoots of recovery, with house sales 7.7% higher in Q2 this year than the equivalent period last year. The rise in sales is powered by increased sales to first-time buyers. But homeowners and prospective buyers are wise to be cautiously optimistic. Although the availability of mortgages is noticeably better, sales levels in the first half of 2013 are still low in contrast to 2007 (only 48% of the level). Sadly there’s still an unhealthy dependency on wealthier borrowers and landlords when looking closely at sales levels.
“Without doubt, the main barrier to a full recovery in the housing market is mortgage lending, which is still low compared to its pre-financial crisis levels. The high cost of rented accommodation is a drain on personal finances, but plenty of first-time buyers have decided to bite the bullet and start saving up for the large deposit needed for a mortgage. Now the economy has crawled out of the badlands, the banking sector is improving rapidly. Lending, particularly to buyers with small deposits, has been boosted thanks to the support of the Funding for Lending and Help to Buy initiatives.
“More first-time buyer activity is needed to ensure the housing market fully rehabilitates. There is volatility in Scottish house prices depending on the distribution of the majority of first time buyers, with cities such as Glasgow and Sterling seeing significant rising prices in June, and more remote parts, such as Orkney and Falkirk experiencing the largest monthly falls in prices. The government must continue to support first time buyers, if the market is to successfully inch its way towards a more sustained recovery. As the economy expands and employment improves, the property market too will perk up.”