House prices edge up by 4% in west

HOUSE prices in the west of Scotland have risen for the first time in almost two years.

The cost of an average home in the west has risen by £4,000 compared with a year ago, according to a report by the Glasgow Solicitors Property Centre (GSPC).

It is the first time since early 2010 that GSPC has reported annual house price inflation in positive territory, but selling prices have been volatile throughout the year with sharp falls followed by significant rallies.

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Average selling prices at the start of 2012 reached £133,000 – almost 4 per cent higher than the £128,000 reported for same period a year ago. Nevertheless, prices remain about 11 per cent, or £17,000, below their peak in late 2007.

“It is important to note that the rise in prices is partly due to the fact that prices dipped sharply a year ago and have been bouncing back since then, albeit rather capriciously,” said Professor Gwilym Pryce of the Urban Studies Department at Glasgow University, who analysed house price data for the report.

GSPC chief executive, Mark Hordern, said: “Significant numbers of homeowners are sacrificing a quick move to maximise their sale price. Despite the growing economic gloom, this has been made easier by historically low interest rates and sustained forbearance by mortgage lenders, which have eased the pressure on borrowers.”

Transaction numbers remain exceptionally low, slumping back towards levels last seen at the start of 2009 after a brief recovery in 2010, while the time it takes to sell a property has lengthened and is now close to the peak at the start of 2011.

Mr Hordern said that 2012 could see a fall in the number of new instructions, which would ultimately restrict supply and, therefore, help to support prices.

“That is exactly what happened in the first half of 2010 and it could well happen again in 2012,” he said.

“Uncertainty about the future is making buyers cautious, but the low level of sales is creating pent-up demand to move and there could well be a flurry of activity once confidence in terms of the economy and in terms of property value return.”

Sarah Speirs, director of the Royal Institute of Chartered Surveyors Scotland, said: “The average sale price in the west has risen slightly because there is a shortage of homes for sale and so the sought-after properties are commanding greater prices.

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“Also, there is returning confidence from buyers who are willing to pay slightly more for a good property.”

But she warned that some sections of the market were still struggling, due to a lack of demand.

“However, property aimed at first-time buyers are still struggling to sell because of difficulties raising a deposit and securing a mortgage,” she added. “But this is boosting the rentals market.”

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