The average house price in Scotland fell by £206, or 0.1%, in October on a seasonally adjusted basis, and now stands at £144,084, according to the latest house price index for Scotland from LSL Property Services and Acadata.
Over the last year, monthly house prices north of the border have increased on five occasions, fallen six times and remained static once.
Despite the small decline in prices in the month, average house prices have risen by £1,368, or 1.0%, over the last 12 months. This is the second consecutive month in which the annual rate of change in house prices has been positive, a pattern not seen since January 2011 some 33 months ago.
Richard Sexton, director of e.surv chartered surveyors, part of LSL Property Services, said: “It’s clear the Scottish housing market is being restored to health. Sales are substantially better and prices are entering a period of prosperity, fuelled by rising consumer confidence and demand. October is the second consecutive month in which the annual change in prices has been positive, a trend that has not been visible since early 2011. Average prices have risen £1,368 over the past year in Scotland, while lending levels are improving rapidly as economic conditions perk up, as is being seen across the UK.
“With the easing of mortgage lending conditions, first-time buyers are having a much easier ride. There is now a better range of competitively priced products with lower deposit requirements, thanks in part to the backing from the government’s schemes. So far 2013 is seeing the greatest number of sales recorded over the last five years. Record low interest rates have sent the market into another realm. Sales have shot up by 23% for the three months of August, September and October 2013 compared to the same period last year. At the bottom end, shoots of first-time buyer activity mean the market is blossoming, a factor that’s giving the whole market a lift.
“After a period of slow movement, it is reassuring to see that home mover and remortgage lending is also improving. People are now more confident in their plans to sell their current homes and buy somewhere else, as signs show the path ahead in 2014 looking stable. The Help to Buy scheme will take on more prominence early next year, and will be the main driving force pushing up house price growth and buyer activity.”
Sexton added: “The recent news that the Funding for Lending scheme will be axed has created an element of uncertainty. But the underlying fact is that the recovery has only just begun. Lending is still only slightly above half the levels seen at the peak of the market, so there is a lot of room for growth. The referendum next year on independence from the UK could have an impact on Scotland’s housing market. But if investors hold on to see what the effect will be, it may unsettle the market and hamper its ability to create the much needed new housing supply in the meantime.”
