Wild west property prices slide but number of sales surges by 15%

VOLATILE house prices in the West of Scotland slipped downward in the first quarter of the year but still managed to maintain a higher average than a year ago, new figures show.

The Glasgow Solicitor’s Property Centre (GSPC), which handles a significant proportion of all house sales in the west of Scotland, found that the average selling price today is just over £131,000 – above the £129,000 recorded in early 2011, but below the £133,000 average selling price at the start of 2012.

Prices are now just over 12 per cent below their peak in mid 2007, it added, and noted that the figures represented the first time since early 2008 that the GSPC quarterly market report recorded two consecutive quarters of positive house price inflation.

While prices have slipped, the number of sales went up sharply by 15 per cent on the same period last year. This outstripped sales volumes in the east – which only managed to grow 12 per cent – but which was hailed by GSPC’s sister organisation, the Edinburgh Solicitor’s Property Centre (ESPC), as a four-year high in its figures released earlier this week.

GSPC said increased volumes were largely driven by sellers reducing their expectations and prices, particularly in the suburbs, where the time it takes to conclude a sale was also faster.

GSPC said that sellers were “coming to terms with market conditions and moderating their expectations on price to achieve a sale”. It added that the increase in homes sold showed a “greater optimism and a new mood of decisiveness among buyers”.

Professor Gwilym Pryce, of Glasgow University, whose analysis formed the basis of the west of Scotland report, said: “While overall the picture looks positive, the results remain mixed.

“The medium-term prospects for house prices in the west of Scotland are probably brighter than they have been for some time, but mortgage lending remains frugal and public sector spending cuts continue to bite.”

Mark Hordern, the chief executive of GSPC, said that while the residential market in the first three months of the year showed “marked improvement”, the study’s results meant any housing market recovery was difficult to predict.

He said: “The first three months of 2012 have seen a marked improvement in sales and the first signs of a new mood of confidence among buyers. At the same time, the shortage of new instructions is gradually restricting supply and the resulting lack of choice is prompting some buyers to look again at homes that have been on the market for some time or to act decisively when a property first comes up for sale.

“Nevertheless, the market remains volatile and the obstacles to a full recovery are substantial.

“Lending is clearly an issue, but the wider health of the economy and particularly the prospects for employment will have a huge impact on the market.

“It is difficult to be confident about how the market will evolve this year.”