Detached homes in demand but other sales fall flat

SALES of detached homes are on the rise, while flats are waning in popularity among would-be home owners, new figures have revealed – as all major Scottish cities except Glasgow experienced a rise in property prices.

A quarterly report from the Registers of Scotland showed that 4.5 per cent more detached homes were sold in the final three months of last year, compared to the same period in 2010 – while the number of flats sold dropped by 6.3 per cent.

The drop in demand for flats pushed prices of the properties 7.4 per cent lower on average, Scotland-wide, while other types of home all nudged slightly higher. Overall, house prices slipped slightly lower, falling by 0.5 per cent.

In the Western Isles, detached property prices rocketed by 23.3 per cent in the period, from £99,765 to £122,945, while sales of flats plummeted by 36 per cent in the same area.

In a boost for homeowners, all of Scotland’s major cities saw an increase in average prices except Glasgow, which dropped by 0.4 per cent.

The Inverclyde area recorded the biggest fall in prices, with a drop of 12 per cent compared to 2010.

East and West Dunbartonshire showed a significant increase in the number of properties changing hands, with both experiencing an increase of more than 28 per cent.

Edinburgh continues to hold the highest average value for domestic properties at £226,000 – up 4.5 per cent on the same period in 2010.

“The biggest increase for the number of sales was for detached houses,” said Kenny Crawford, Registers of Scotland’s director of commercial services.

“However, the sale of flats dropped by 6.3 per cent, meaning that the overall volume of sales in Scotland rose by 0.2 per cent.”

He added: “The strength of sales in the house market is having a levelling effect on the market as a whole and this is keeping the changes to Scotland’s property averages at under one per cent.”

The lack of demand for flats is created by a depressed housing market at the bottom end – there first-time buyers and buy-to-let investors are struggling to get mortgage credit. However, sales of flats still account for more than 65 per cent of the domestic property market in Glasgow and Edinburgh and 34 per cent across Scotland as a whole.

“It is down to the old issue that the smaller properties at the lower end of the market are worse affected as people struggle to get mortgages,” said David Marshall, spokesman for the Edinburgh Solicitors Property Centre. “Larger family homes tend to not be as affected by the economic problems, as they are less reliant on mortgage financing.”

He added that families may be finding it easier to move up the housing ladder as property prices make larger homes more affordable. “Of course, if you’re moving from a flat to a house, chances are you will get less for your property, too,” said Mr Marshall. “But that tends to work in the favour of people who are moving up the ladder, as 10 per cent less on a £100,000 property is less to lose than the 10 per cent you’re getting off the more expensive home of £300,000.”

However, experts have warned that sellers need to be realistic about property prices if they want to sell their home – adding that the depressed market is likely to continue for at least the rest of the year.