House prices in the Highlands and Islands edged upwards during June. According to the latest figures released by the Highland Solicitors Property Centre (HSPC), the average house price was up 2% on the figures for June 2010.
HSPC believes the rise is part of a pattern of price fluctuations that have been seen across recent months, rather than the start of a significant recovery.
Figures across the first half of 2011 show that average house prices for the six months fell by 3.6% compared with the same period in 2010.
These figures come against a background of record enquiries. The HSPC website continues to generate 40% more enquiries compared with 2010. HSPC says this indicates there is growing pent-up demand from potential buyers. But, they are either unable or unwilling to commit. Many, particularly first-time buyers, are finding it difficult, or impossible, to arrange mortgages.
The severity of the restricted mortgage supply has been revealed in figures from the CML. They reveal that in 2010 there were 17,600 mortgage advances to first-time buyers – less than half the 35,300 figure in 2007.
HSPC has welcomed the Scottish government’s announcement of a £250,000 funding package to establish a mortgage indemnity scheme. The aim is to help those who can afford a mortgage, but are currently excluded because of the high level of deposit required.
In addition to tight mortgage supply, the commitment to buy is also being held back by potential buyers’ uncertainty about their own financial prospects. Recent economic news has done little to boost financial confidence.
HSPC claims that the record level of enquires does show is that, when the mortgage supply eases and confidence in financial prospects increase, the market could recover quite quickly.
Meanwhile, property in the Highlands remains a buyers market, with a record number of properties to choose from – up 29% on June 2010. With supply continuing to exceed demand, prices remain keen.
Those looking to sell properties at the moment can remain confident that there are record numbers of people currently enquiring about Highland properties. Although the number of sales is being restricted by financial factors, the total number of houses sold in June was only 9% down on the same month in 2010.
