SCOTTISH homeowners can expect the value of their property to rise by 20 per cent over the next five years as the housing market finally “turns a corner”, a report has claimed.
There have been “significant” increases in transactions and the value of property sold, according to quarterly figures released by estate agency Rettie, while the recovery is now being seen in rural areas as well as urban hotspots such as Aberdeen or Edinburgh.
Strong economic recovery, combined with improved lending and improved consumer sentiment, will drive prices higher by 2019, the report claimed.
However, experts warned that the market is still some way off its previous peak. In Edinburgh, the market is only half of its peak 2007 value in real terms, while, in Glasgow, it is only one-third of the peak of six years ago.
“I have not witnessed such a strong finish to the year ever before. Confidence in the major cities continues to build and transactional volumes increase,” said Simon Rettie, managing director of Rettie.
“As previously reported, the middle market has been the driver for growth, leading to an improvement in the £1 million-plus market. In fact, the number of our transactions over £1m recorded to date in the calendar year is double that of the previous year. We anticipate this confidence continuing early in the New Year.”
Government stimulus packages are now improving access to mortgage finance, Rettie said, which is helping to increase demand for property, especially from first time buyers.
The Scottish Government launched its Help to Buy Scheme in October, which sees the government take an equity stake of up to 20 per cent in a property priced up to £400,000.
Peter Ryder, chairman of Solicitors Property Centres Scotland, said: “The market has shown a great improvement during 2013 with the number of house sales up in every area.
“Although the sales are up significantly, the average house prices remain stable. Even with the rise in sales volumes, the number of transactions are still well below what we saw at the peak of the market.”
But he warned that homeowners should not rely on any predicted increase in property values. “It is difficult to predict what house prices will do over the next five years,” he said. “It is really dependant on the banks’ lending policy.”