The sharpest monthly fall in Scottish home prices since November 2009 has been reported by the latest LSL/Acad Scotland House Price Index as the market suffers from an “Olympic jetlag”.
Scottish property prices fell 2.9% in September compared to the same month last year, as a result of falling sales, with housing transactions dropping by 17% in September compared to August.
Gordon Fowlis, regional managing director of Your Move, an estate agency owned by LSL, comments: “House prices lost some of their altitude in September, but this wasn’t a simple case of the market losing thrust. The Scottish housing market was still jetlagged following the distraction of the Olympics, with the absence of buyers hitting the streets in August feeding through into a reduced number of sales in September. As fewer buyers competed for homes, reduced competition sent prices gliding down.”
Despute the latest decline in prices, Fowlis does not belie that they are heading for a crash-landing.
We’ve already seen sales figures rebound in England and Wales, and Scotland’s likely to show a similar improvement in the last quarter of the year as buyers make up for lost ground over the summer,” he added.
The decline in values has increased the affordability of house prices for the average Scottish buyer, but the limited availability of mortgage finance is still a significant drag on activity, reflected by the fact that the number of new buyers entering the market is still historically low. But Flowlis insists that is reasons for optimism.
He continued: “The economy is growing once again, while inflation is slowing, which should help buyers’ spending power take off. On top of this, the government’s Funding for Lending is showing signs of helping the mortgage market start climbing again. While lenders’ ability to boost the number of first-time buyers to anything like pre-crunch levels is being hampered by capital adequacy requirements, any improvement in the lower tier will be felt throughout the wider housing market as chains are unlocked.
Article courtesy of Property Investor Today