Scottish house prices return to 2007 levels
Scottish house prices are almost identical to the price level of four years ago, according to the latest Scottish House Price Monitor from Lloyds TSB Scotland.
On an annual, underlying basis Scottish house prices have increased by 2.4%.
In the three months ending April 2011, the quarterly price index for the average domestic property in Scotland fell by 3.6%, reversing earlier gains. Following mix adjusting, the average Scottish house price is now £153,335.
As with last quarter's Monitor, the latest house price movement has been generated from a market with a low number of sales. The number of house purchases recorded in this quarter's Monitor is 6% down on the last quarter and 18% below the same quarter of last year.
For the market as a whole, Scottish house purchases in March 2011 were 3.1% less than March of the previous year. However, the number of transactions in March was 42% up on the previous month. The number of housing transactions in the Scottish market continues to be around half of pre-recession levels.
Donald MacRae, chief economist, Lloyds TSB Scotland, said: "The Scottish economy exited recession at the end of 2009. A slight fall in output in the first quarter of 2010 was followed by robust growth of 1.3% in quarter two and trend growth of 0.5% in quarter three, before a weather-induced fall of 0.4% in the last quarter. Most indicators, including the Bank of Scotland PMI, point to a resumption of growth in the first quarter of this year.
"The Scottish housing market has adjusted to the recession with a halving of sales and a period of volatile price movement over the last three and a quarter years. Average house prices in Scotland are now very close to the levels of four years ago. Consumer confidence has fallen due to high levels of retail price inflation in excess of increases in earnings squeezing disposal income. The slow recovery from recession is being expressed in the housing market, principally through low levels of sales and a return to the prices of four years ago."