Scottish housing market improves with lower prices

Indications of increased activity in the housing market. Picture: Jon Savage
Indications of increased activity in the housing market. Picture: Jon Savage
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Green shoots are beginning to show in the Scottish housing market, as a string of regional property reports hinted at an improvement in both activity and price.

Reports published by property umbrella groups in Edinburgh, Glasgow and the Highlands revealed an upturn in prices in some areas – and a flurry of buyer activity in others.

Meanwhile, a separate report from the Royal Institute of Chartered Surveyors Scotland showed that expectations of prices rose for the first time in almost two years, despite activity remaining fairly flat last month.

In Glasgow, sales rose by 6.5 per cent in the first three months of the year, according to the Glasgow Solicitors Property Centre (GSPC), although prices slumped by almost 5 per cent from a year earlier – while in the Highlands, the volume of sales rocketed by 12 per cent compared to the same period last year.

Property prices remained fairly steady in Edinburgh – rising by under 1 per cent – with what little growth there was driven by demand for larger, family homes and two-bedroom flats in the city’s leafier suburbs. GSPC chief executive, Mark Hordern, said that sellers were becoming more accepting of the price they expect to get for their homes, fuelling a rise in the number of properties on the market.

“A combination of lower prices and faster sales suggest that sellers have come to terms with the new market realities and are now determined to move, even if it means accepting a lower price for their home than they had originally hoped for,” he said. “Given that the purchase price of their next home is also likely to be lower, that probably makes sense.”

Prices in Glasgow and west central Scotland slumped by an average of £6,000, to £115,000 – the same as the average price in 2005.

However, average selling times dropped from around six months this time last year to four and a half months in the first quarter of 2013.

In the capital, buyer activity picked up over the last 12 months, the Edinburgh Solicitors Property Centre (ESPC) said – but warned sellers that 80 per cent of properties sold for under their home report valuation.

Buyers paid an average of 6.1 per cent below the valuation figure on their new homes to secure their purchase, with smaller properties seeing the biggest decrease in value.

The average property in Edinburgh stood at £193,443 in the first quarter of the year, with two-bedroom flats in the Stockbridge/Comely Bank area reporting the biggest increase compared to the previous year – of 12.1 per cent.

The ESPC, which is made up of 140 property agents in Edinburgh, the Lothians, Fife and the Borders, said that the number of sales to first time buyers and landlords – both of which were hit hard by the economic downturn – had increased between January and March.

David Marshall, business analyst with the ESPC, said: “We’ve seen an upturn in activity from first-time buyers and buy-to-let investors recently, but in most cases these buyers are seeking to use market conditions to their advantage to negotiate sales below the Home Report valuation.

“As a result, while the number of smaller properties selling has increased, the average price they are achieving has come down.”