Scottish house prices fall while house sales begin to rise

Scottish house prices have continued to fall in the latest quarter, according to the Scottish House Price Monitor from Lloyds TSB Scotland.

In the three months to 30 April 2009, the quarterly price index for the average domestic property in Scotland fell by 4.3 per cent to give an average mix adjusted Scottish house price of £148,990. This latest fall is greater than the 2.3 per cent fall in the previous quarter and provides evidence of the difficult start to the year in terms of both house prices and the number of house purchase transactions.

On an annual basis, Scottish house prices have now fallen by 2.1 per cent. The volume of house purchase transactions is down 35 per cent on the levels recorded for the same period last year. Within this figure, purchases of flats have fallen by 39 per cent while semi-detached sales are down by 28 per cent.

The picture across the country remains very mixed with two areas still reporting a small annual rise compared with more significant annual falls elsewhere. However, while house prices fell in each month of January, February and March, price rises were recorded in April. House price transaction numbers rose in both March and April.

Professor Donald MacRae, chief economist, Lloyds TSB Scotland, said: "The Scottish economy is now firmly in recession. Consumer confidence has fallen and claimant unemployment has risen. However, there is evidence of consumer confidence marginally improving while retail sales continue to increase on an annual basis.

"The cost of borrowing has reduced for many mortgage holders while there has been a slow but perceptible increase in the level of mortgage availability for first time buyers. The Scottish housing market continues to adjust to changing circumstances with reduced sales, lower prices, but no precipitous collapse."