Scottish house sales up by a third

THE number of home sales in Scotland has risen by up to a third in the first two months of this year in the busiest period for the housing market since the start of the credit crunch.

Property agents say transactions in the Glasgow area have soared by 32 per cent and around 18 per cent in the greater Edinburgh region since the New Year because houses are now more affordable.

Average prices have dropped by around an average 12 per cent because of the effects of the economic downturn over the last three years and sellers are now accepting that their properties will no longer attract the massive mark-ups of the pre-2008 housing boom. In addition, restrictions on home loans are now easing and first-time buyers are rushing to complete purchases before the government’s holiday on stamp duty finishes at the end of March.

Mark Hordern, the marketing manager at the Glasgow Solicitors’ Property Centre (GSPC), said: “We are not in a position as yet to say the worst is over but there has been a big bounce in sales of around a third in Glasgow in the first two months of 2012.

“We believe that is reflected in similar figures around the country and one of the most notable things is the change in the attitudes of buyers. To use a fishing analogy, up to then there were a lot of tugs on the line but now there are solid takes. They are going ahead with sales rather than hanging back.”

One reason was that both companies and individuals believe they have “weathered” the economic storm and the economic prospects are brightening, Hordern said. “Also, properties are now more affordable than they have been for some time with sellers accepting offers around or even below the valuation made in Home Reports, rather than expecting a big premium on top as was previously the case.

“Also, because mortgage costs are low, people who can raise a deposit are going ahead. Recent Bank of Scotland figures said house prices were now at their most affordable for 14 years.”

The Edinburgh Solicitor’s Property Centre (ESPC), which covers the Lothians, Fife and the Borders, said it was experiencing a similar upturn in sales with more than 400 transactions in the last four weeks. “It has been the busiest start to the year since 2008,” said David Marshall, business analyst at the ESPC, “with sales up by 16 per cent across the area as a whole and around 17.5 per cent in Edinburgh. Part of this is due to sellers being realistic and being more willing to accept lower offers, sometimes below the value outlined in the Home Report.

“It may also be because in some cases rents – which went up during the recession as the housing market slowed down – are now higher than what you pay out for a mortgage. So it is making more sense to buy. Typical first-time buyer flats – in areas such as Gorgie and Leith – which were on sale for around £130,000 can now be had for around £100,000.”

Savills, a property agency which deals with upmarket properties, said it was having the “best start to a year for a long time”.

Partner Jamie MacNab said: “There is an acceptance by sellers of the reality of the present market. There are many bargain hunters out there and at the moment they are getting bargains.”

The major activity at present was in the market for homes below £600,000.

The improving picture in Scotland follows UK figures published last week which showed that house prices were also on the rise with a 0.6 per cent increase in February. Nationwide building society said it was the highest monthly rise for almost two years.

Meanwhile, Halifax, the UK’s largest mortgage lender, was today expected to announce its standard variable rate will rise by half a percentage point from 1 May.

The rise, from 3.5 per cent to 3.99 per cent, was due to the higher cost of raising funds for mortgages, the bank said. The expected move came after RBS raised the rate on two of its mortgages from 3.75 per cent to 4 per cent on Friday.

Last night, Citizens Advice Scotland warned any rise in rates will be a “bitter blow” for homeowners already struggling financially.

Susan McPhee, head of policy at CAS, said: “We would urge all of the banks to consider the financial realities that many of their customers are facing at the moment, and to remember also that it was the taxpayer who bailed them out a few years ago.”