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House prices 'begin to recover' House prices 'begin to recover'
(29 minutes later)
The average price of a house in Scotland rose slightly in the past three months, a new report suggests. Scottish house prices have shown a slight increase in the most recent index published.
Economists said the report provided further hope that the housing market was beginning to recover. Lloyds TSB Scotland said its quarterly monitor had registered a rise of 0.7% in house prices in the three months to the end of October.
The Scottish House Price Monitor report from Lloyds TSB said the average house price had gone up by 0.7% to £153,605. Its chief economist said the market is "beginning to recover".
There were 33% more homes sold in October than in May, when the market was at its lowest point. House prices have fallen by 7.5% in the past year. However, the year to the end of last month saw the average price fall by 7.5%. And the number of transactions was down by nearly a third.
Professor Donald MacRae, chief economist of Lloyds Banking Group Scotland, said he believed consumer confidence had recovered from the lows of a year ago, and was now back in positive territory despite still being below the levels before the credit crunch. That is when compared to activity in the Scottish homes market in the same quarter last year.
The Scottish housing market is beginning to recover Professor Donald MacRaeLloyds TSB High levels of volatility
He said: "The cost of borrowing has reduced for many mortgage holders while there is now a perceptible increase in the level of mortgage availability including first time buyers. The market reached its slowest point in May this year, while house prices reached their lowest point in March. They have risen in four of the seven months since then.
"The Scottish housing market is beginning to recover." The average price in the most recent quarter has risen from £152,561 to £153,605.
The increase of 0.7% in the latest quarter follows a price fall of 1.4% in the previous quarter and a fall of 4.3% in the quarter before that. The annual price fall has affected all areas of Scotland, ranging from 0.7% in the south-east (excluding Edinburgh) to a drop of 9.8% in Dundee.
There were marked differences in price changes across the country, with rises in some areas and falls in others. Figures for the most recent quarter have shown unusually high levels of volatility. Edinburgh prices fell sharply in one quarter - by 11.8% between the start of August and October, yet by only 6% over the past year.
Aberdeen saw the biggest increase, with prices going up 13.4% in the previous quarter. The north of Scotland, excluding Aberdeen, saw prices falling 7.2% in the year, while rising by 6.9% in the most recent quarter.
Larger swings Aberdeen was down 8.1% in the year, but up by 13.1% in the three months to the end of October.
However Edinburgh and Glasgow have not fared so well, with 11.8% and 9.8% price decreases respectively over the past three months. Glasgow home prices were down 8.1% in the year, and 9.8% lower in the most recent quarter.
The report said that price movements in the latest quarter were particularly volatile with larger swings than normally experienced over the past 10 years. The remainder of the south-west region, apart from Glasgow, was down 9.7% in the year, and up by 0.4% in the most recent quarter.
On an annual basis, prices have decreased in all areas of Scotland, ranging from a 0.7% drop in the South East (excluding Edinburgh) to a 9.8% slump in Dundee. Consumer confidence has recovered from the lows of one year ago and is now back in positive territory, but is still below the levels of pre-credit crunch Professor Donald MacRaeLloyds TSB
In the last quarter semi-detached houses fared best, with prices increasing, but prices of flats, terraced houses and detached houses fell. For central Scotland, Fife and Tayside (excluding Dundee), Lloyds TSB found prices 8.2% down in the year, and 1.4% up on the quarter.
The report stated: "The worst of the housing market downturn is now past with some areas of Scotland showing price increases." Although Dundee saw a sharp drop in the most recent annual figure, at 9.8% down, its quarterly drop was 1.3%.
The south-east, excluding Edinburgh, saw prices drop in the year to October by 0.7% ,while its rise in the quarter was 2.7%.
The price of flats has been falling more heavily than other types of home, down for six consecutive quarters. The latest quarter showed a fall of 1.3%, and 8.4% on the year to October, to an average £119,900.
Terraced house values fell by 8.6% on the quarter and 5.4% on the year, to cost, on average, only £700 more than flats. Semi-detached houses saw an increase for the first time in 15 months, up by a significant 12.5%, while showing an underlying annual fall of 7.3%. The average price, according to Lloyds TSB, was nearly £163,000.
Detached house prices were down 2.4% in the most recent quarter, but the annual price fall is reckoned to be 8%, to an average £232,000.
Professor Donald MacRae, chief economist, Lloyds Banking Group Scotland, said: "Consumer confidence has recovered from the lows of one year ago and is now back in positive territory, but is still below the levels of pre-credit crunch.
"The cost of borrowing has reduced for many mortgage holders while there is now a perceptible increase in the level of mortgage availability including first time buyers. The Scottish housing market is beginning to recover."