The latest LSL/Acadametrics House Price Index shows an increase of £1,676, or 1.2% in the average price paid for a house in Scotland in February, compared to January.
This is the largest increase in house prices seen in a single month since June 2007, prior to the onset of the credit crisis and subsequent funding restrictions.
It is also the second month in succession in which we have seen relatively high increases in house prices, with January up 0.7%.
Richard Sexton, director of e.surv chartered surveyors, part of LSL, said that despite difficult mortgage lending conditions and economic uncertainty, the housing market in Scotland is starting to turn a corner.
She said: “House prices climbed £1,676 in February, house sales are 6% higher this year and mortgage availability has improved. The lack of supply in properties in Scotland has effectively boosted competition between new and previous buyers, leading to higher prices for well positioned properties.
“Three consecutive months of rising house prices suggests the market is well set on the road to recovery in 2013. But several big roadblocks still remain. House prices are £2,181 lower than they were last year and mortgage lending criteria are tight, which are alienating a vast range of potential buyers from the property market.
“The Funding for Lending scheme has improved market confidence as it has allowed lenders to reduce mortgage rates and lower interest rates, but borrower’s personal finances are under withering fire from inflation so they are struggling to put together a deposit. It’s proving to be a real effort for those suffering under the impact of inflation and public spending cuts in Scotland, which are threatening people’s dreams of home ownership.”
Sexton said that at a local level prices are much more varied, and highlight the endemic weakness that still remain in the market. In February prices increased in 17 out of the 32 local authority areas suggesting on a regional level, the rate of growth in the housing market is flat compared to the wider UK housing market.
He added: “More attention must be focused on improving the opportunities for first time buyers. To its credit, the government at least recognized this in the Budget. It will be a real turning point if the latest two schemes under the Help to Buy plans prove to support a significant portion of first time buyers that don’t have the help of the bank of Mum and Dad.
“The lower tier of the market requires a real boost in mortgage finance and this will help support housing demand in the long term. This year all eyes will be glued to the Scottish Parliament’s response to these schemes and to what extent they may have the power to strengthen the property market.”
