SCOTLAND was among six of 13 UK regions to report a fall in UK house prices over the past year, new figures have revealed.
A separate report has shown that UK-wide, the value of homes dropped by 1 per cent compared to February, and fell by 0.9 per cent compared with the same month last year.
The end of a first-time buyer stamp duty concession helped push property values down in March – the first annual drop in six months. Around four in ten first-time buyers have benefited from the stamp duty concession during the two-year period, according to recent research.
Lender Nationwide, which issued yesterday’s house price figures, said it was difficult to estimate how much the policy had boosted the market, as it is not known how many sales would have otherwise taken place.
But the report said: “Nevertheless, the reintroduction of stamp duty is likely to pose a further headwind to housing market activity in an already challenging environment.”
The average price fell to £162,712, while the lender warned that property values are likely to head sideways or downwards over the coming year as the weak economy acts as a continuing “drag”.
Nationwide said the 7 per cent stamp duty rate imposed on £2 million homes in the recent Budget was also likely to have an effect on the market, “albeit a modest one”.
However, experts have previously said that the new measure, included in the Budget last week, would have little effect on Scotland, where very few properties are sold for more than £2m.
“The 1 per cent dip in house prices in March is quite a shock,” said Howard Archer, chief economist for IHS Global Insight. “It is evident that housing market activity and prices had been supported to a limited extent at the start of 2012 by first time buyers looking to beat the ending of the stamp duty concession. However, this impact clearly increasingly waned during March.”
In a separate survey published yesterday, the lender said that quarterly prices north of the Border had risen slightly – by 0.5 per cent – but revealed a 0.2 per cent drop over the past year.
Robert Gardner, Nationwide’s chief economist, said: “Dundee & Angus was the best performing area, with prices up 1 per cent year-on-year. Perthshire & Stirling was the weakest performing area.”
The most expensive area in Scotland over the period was Edinburgh, while Fife was the least expensive.
But prices in the capital, where the average home costs £234,091, fell by 6 per cent over the first quarter of this year – a drop only beaten by Perthshire and Stirling’s 8 per cent fall and equalled by 6 per cent slumps in Aberdeenshire & Moray, Dunbartonshire and North Lanarkshire.
The north of England saw the strongest growth in the first three months of this year, taking the average house price to £114,828, while Wales saw the biggest drop, with a 3.1 per cent dip dragging typical prices to £129,682.
London, with a year-on-year price rise of 2.3 per cent, had average prices of £293,375.