Edinburgh loses crown for highest house prices

The annual report from the Registers of Scotland (RoS) also shows Edinburgh was overtaken by East Dunbartonshire as the local authority area with the highest average price.

The report published yesterday found that Scotland-wide property sales from October to December in 2010 dropped by 6.4 per cent in value compared to the same period the year before.

Meanwhile, Bank of England statistics revealed lending in the UK had dropped to a record low last year - a fall of more than 11 billion on the previous year.

The RoS survey showed that the value of property sales during the final three months of 2010 tumbled to just over 3.1bn, compared to the same period in 2009 - when it had stood at more than 3.3bn.

The number of homes sold across Scotland also plummeted by 7.9 per cent to 19,798 during the same period.

East Dunbartonshire had the highest percentage price rise, with an average property price of 216,644 - up 10.5 per cent on the same quarter of 2009.

Edinburgh recorded an average price of 216,597 - an increase of 3.9 per cent over the year.

The largest percentage fall in price was in Inverclyde which showed a drop of 8.3 per cent to 119,115.

While the value and number of property sales decreased, prices showed a small increase for the year overall.

The national average sale price increased by 1.7 per cent to 158,213, during the final three months of 2010, compared to the same period in 2009.

Meanwhile, Neil Harrison, a mortgages expert at the Edinburgh Solicitors' Property Centre, blamed the harsh weather conditions that gripped Scotland at the end of 2010 and a lack of credit for buyers for the decline in the value of sales.

He said: "The last three months of 2010 were pretty much a write-off in terms of sales of homes as the winter weather was just so bad. The key reason for the lower sales value though is the problem first time buyers are having getting mortgages.

"Mortgages are much harder to get now and the deposits are much higher than they used to be, with people being asked for deposits of 15 to 20 per cent of the cost of a property.

"All this means that fewer flats and smaller homes are being sold because they are traditionally what first time buyers go for.

"At the same time bigger homes are tending to still get sold, as these buyers tend to have more access to credit and funds.

"That factor goes some way to explaining why overall prices went up at the end of 2010 compared to the same period in the year before."

Meanwhile, the RoS figures showed that the value of sales in Edinburgh fell by 8.8 per cent to 428,646,006, while Glasgow's figure dropped by 12.2 per cent to 291,332,904.Kenny Crawford, head of commercial services at RoS, said all property types were affected by the falling sales figures.

"Scotland saw over 3bn-worth of property change hands during the last three months of 2010," he said. "All four property types - detached, semi-detached, terraced and flatted - saw fewer sales."

Conservatives housing spokesman Alex Johnstone claimed that "stringent" and "unrealistic" mortgage policies were depressing Scotland's housing market.

He said: "This situation is deeply worrying, not just for those who wish to buy a home of their own, but for the whole Scottish economy.

"First of all we saw wholly inappropriate lending and remortgaging on properties.

"Now we have many people simply unable to access mortgage finance without huge deposits, or they are being refused a mortgage because of stringent, and at times, unrealistic lending criteria.

"The fact is that the construction industry is a major contributor to the Scottish economy, and if responsible people have difficulties accessing mortgages, then house builders have no incentive to build homes they can't sell.

"If the Scottish Government wants to retain any shred of credibility on housing issues, then it must engage with the Council of Mortgage Lenders, and others in order to get the system moving again."