Scottish housing market on the up

The worst of the housing market downturn is now past with some areas of Scotland showing price increases, according to the latest Scottish House Price Monitor from Lloyds TSB Scotland.

In the three months to 31 October 2009, the quarterly price index for the average domestic property in Scotland rose 0.7 per cent on the previous quarter.  Following seasonal and mix adjusting, the average Scottish house price rose slightly from £152,561 to £153,605.

On an annual basis, Scottish house prices have fallen by 7.5 per cent.  However, prices are now beginning to increase once more.

The volume of house purchase transactions is down 32 per cent on the levels recorded for the same period last year.  The number of transactions reached its lowest point in May 2009 but has since been on an increasing trend with the number of transactions in October 33 per cent more than in May.  Similarly, average house prices reached their lowest point in March, but have increased in four of the last seven months, providing further signs of a slight recovery in the Scottish housing market.

All areas continue to report an annual fall in prices ranging from -0.7 per cent in the South East (excluding Edinburgh) to -9.8 per cent in Dundee.  Price movements in the latest quarter are particularly volatile with larger swings than normally experienced over the last ten years.

Professor Donald MacRae, chief economist, Lloyds Banking Group Scotland, said: "Consumer confidence has recovered from the lows of one year ago and is now back in positive territory but is still below the levels of pre-credit crunch.  The cost of borrowing has reduced for many mortgage holders while there is now a perceptible increase in the level of mortgage availability including first time buyers.  The Scottish housing market is beginning to recover."