Scottish house prices rise as property market recovery continues
21-06-2012
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House sales were 12% higher in first four months of 2012 compared to 2011 and there have been strong annual prices rises in Aberdeen and Edinburgh. The average house now costs 146,309 and this is just 0.6% less than 12 months ago, the index also shows. But the recovery varies on a regional basis.
Edinburgh and Aberdeen have seen hefty price increases compared to April last year, while on the flip side home owners in Glasgow and Ayrshire have seen the value of their home decline during the same period. Aberdeen has seen annual prices growth of 12.2%, in Edinburgh it is 5.6% but in Glasgow prices are down 6.7% while in East Ayrshire they are down 12.9% and in North Ayrshire they are down 13.7%.
Also, the report points out that despite prices increasing nationally, 18 of the 32 local authorities in Scotland have seen house values fall over the last year. Some areas have struggled more than others with the effects of the downturn and public sector austerity, with local economies still reeling from the effects of high unemployment and weak private sector investment. This has pushed down house prices well below the national average in some localities, said Richard Sexton, director of e.surv chartered surveyors, part of LSL.
The housing market is coping admirably with the treacherous economic conditions swirling around it. Prices have risen for the second month in a row, suggesting the market may have turned a corner following a difficult winter period where prices fell for four consecutive months. He explained. He said the outlook is one of cautious optimism.
Demand for moving home is still strong, despite buyers having to piece together big deposits to access affordable mortgages. Plenty of buyers are sick of being stuck in expensive rental accommodation. Rather than line the pockets of landlords, many of them have decided to roll up their sleeves and piece together a deposit, he explained. It is a lack of mortgages, rather than weak demand which is holding back the market.
Thats why all eyes will be on the economy and the eurozone. Borrowers will be hoping banks show enough resilience to resist the effects of a gridlocked economy and the deteriorating situation in the eurozone. The prospects for the housing market will be inextricably linked to decisions made in Berlin, Madrid and Athens,? Sexton said. If investor confidence in the euro disintegrates completely, and Greece makes a messy exit from the single currency, it could restrict banks? ability to grant mortgages, particularly to first time buyers, he added.
