Scottish house prices rose by 7.3 per cent in the three months ending July 2012, according to Lloyds TSB Scotland, leaving the average value of property close to its all-time high. On a year-on-year basis, prices dropped by 1.5 per cent but nonetheless the market is picking up, says the report, as values reach £164,122 – 95 per cent of their peak of four years ago.
The latest house price movement has been generated from a market with a low but increasing number of transactions. Compared to the previous quarter, the number of transactions in the Monitor is up by 37% and by 29% when compared to the same quarter one year ago. Although the number of transactions has increased in the Monitor over the past year, prices continue to show volatility.
For the market as a whole, Scottish house purchases during the second quarter of 2012 showed an increase of 9.2% on the same quarter of last year. For the month of June, the number of transactions was up 1.9% on the same month in 2011.
Donald MacRae, chief economist, Lloyds TSB Scotland, said:
“The Scottish housing market had adjusted to the recession with a halving of sales and a period of price volatility. However, these latest Monitor results show a pick-up in both activity and prices. Average house prices are now 95% of their peak of four years ago. Although consumer confidence has become less negative during the first six months of the year, it still remains low with retail price inflation in excess of average increase in earnings continuing to squeeze disposable income. The rate of increase in consumer spending remains modest.
“The largest pick-up in the market is at the higher value end with the number of transactions for detached properties in the Monitor increasing by 47% compared to the same quarter one year ago. While all property types are showing a quarterly price gain, the average prices of flats has increased the least. The Scottish housing market is showing a pick-up in both activity and price.