House prices rise despite more homes on market

Published on Sunday 13 June 2010 21:39

SCOTTISH property prices have increased this month despite a sharp rise in the number of homes going on the market across the UK, according to figures published today.

Asking prices in Scotland are up 1 per cent in June after declining by 0.3 per cent last month, with the average property for sale in Scotland worth 152,283, the latest FindaProperty.com house prices index shows.

Scottish house prices are still 0.6 per cent down on a year ago, according to the index, which revealed that first-time buyer affordability has improved in recent weeks. The average first-time buyer north of the Border now needs a deposit of 27,112, against 29,305 last month, with the typical first-timer facing an asking price of 110,220.

FindaProperty also reported that the number of properties for sale in the UK has reached its highest level since January 2008. The number of homes on the market is now 35 per cent higher than in January, casting doubt over the outlook for house prices for the remainder of the year. Last year's price increases were fuelled by an imbalance of demand over supply, suggesting that an influx of new supply could send prices back down.

However, Nigel Lewis, property analyst with FindaProperty.com, said that while there was a flood of new properties hitting the market in early June, demand continued to outstrip supply.

He said: "Demand for property has helped prices stay strong despite the explosion in the number of homes for sale and this fifth month of rises means asking prices are now higher than at any point since July 2008.

"But with government austerity measures due to be imposed in the near future it is unlikely that prices will rocket out of control."