'Recovery signs' amid price falls

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Scottish house prices continued to fall in the past three months but there are signs of a marginal boost in consumer confidence, according to a survey.

Lloyds TSB's house price monitor recorded a 4.3% fall in prices for the quarter, compared with a 2.3% drop in the previous quarter.

Prices fell in each of the first three months of the year, but rises were recorded in April.

The number of homes sold rose in March and April, but the annual fall was 35%.

Flats have fared the worst, with 39% fewer purchases on the levels recorded for the same period last year, while sales of semi-detached properties were down 28%.

House prices quarterly change Aberdeen: -4.5%Central/Fife/Perth/Tayside: +9.6%Dundee: -17.5%Edinburgh: -7.6%Glasgow: -7.2%North: -16%South East: -1.4%South West: -2.5% <i>Source: Lloyds TSB</i>

The study suggests that a 4.3% fall in prices for the latest quarter has brought the average cost of a home in Scotland to £148,990.

Dundee and the north of Scotland (excluding Aberdeen) saw the steepest drops in prices since January, of 17.5% and 16% respectively.

The region encompassing Fife, Perth and Tayside was the only area to see a rise in the study, recorded at 9.6%.

Lloyds TSB Scotland chief economist Professor Donald MacRae said the Scottish economy was now firmly in recession, but was so far avoiding a "precipitous collapse".

"Consumer confidence has fallen and claimant unemployment has risen," he said.

"However, there is evidence of consumer confidence marginally improving while retail sales continue to increase on an annual basis.

"The cost of borrowing has reduced for many mortgage holders while there has been a slow but perceptible increase in the level of mortgage availability for first-time buyers."