NEWS
Value of Scotland's detached houses up by over £800 per month in past decade
04-10-2012
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The latest research from the Bank of Scotland shows that since the middle of 2002 the average price of a detached home has grown by almost £98,000, or 70%, to £238,111.
Over the past 10 years the average price of terraced houses in Scotland has grown by 85% to £114,921, the average price of semis has increased by 82% to £139,017, followed by flats by 75% to £111,602 and bungalows by 70% to £171,172.
Detached houses have outperformed all other property types since the start of the financial crisis in 2007. In the past five years, the average price of a detached property has fallen by 9%. This compares with a 16% decline in the average price of semis and a 17% fall in the price of bungalows. Meanwhile terraced houses have fallen by 27% and flats by 23%.
The Bank says that the tightening in mortgage lending criteria since 2007 has impacted many buyers, making it more difficult for first time buyers, in particular, to enter the market. This development is consistent with terraced houses and flats recording the largest price falls in recent years as these property types are very popular with first time buyers. Terraces and flats combined accounted for 71% of all first time buyer purchases during the first half of 2012 in Scotland.
In contrast, terraces and flats recorded bigger price rises than other property types during the five years before the crisis from 2002 to 2007, up by 152% and 126% respectively. Circumstances for first time buyers were easier at this time with a much greater availability of high loan to value mortgages.
The average price of a detached house is now 71% higher than that for a semi detached home, a gap that has widened from 59% at the height of the housing market in the middle of 2007, the research also shows.
Similarly, percentage differences in prices between detached properties and terraces and flats have also widened. The average price for a detached home is 107% higher than for a terraced house compared with 67% five years ago. Since 2007, the difference in the average price of a detached house and that of a flat has more than doubled to 113% from 45% five years earlier. ‘The prices of those property types in Scotland that are less reliant on first time buyers, such as detached homes, have been more resilient since the financial crisis in 2007,’ said Nitesh Patel, housing economist at the Bank of Scotland.
‘Nevertheless, prices of all property types in Scotland have fallen over the past five years with the biggest declines for flats and terraced homes. These types are particularly popular with first-time buyers and their sharper price falls probably reflect the difficulties that those looking to enter the market for the first time have been facing,’ Patel added.
The research also found that semis and terraced housing account for a larger share of house sales since 2007 at the expense of flats and detached homes. These two types have seen their combined share of all home sales rise from 35% to 45% in 2012. Terraced properties now account for a quarter of all house sales, up from 16% in 2007. The share of semi detached homes has edged up from 18% to 20% during the period.
In contrast, flats have seen a drop in their share of all sales since 2007 from 36% to 32%. Detached homes have also seen their share of all sales decline, from 20% in 2007 to 14% in 2012.
The research says that the increase in the share of sales accounted for by semis and terraced housing may be due to greater difficulty in trading up to detached houses and low transactions levels for flats given low new build volumes and existing flat owners are often unable to trade up because of little or no equity.
