Regional Managing Director of Your Move Gordon Fowlis Comments On The Latest Scottish House Price Index
The May 2012 Scottish House Price Index from LSL Property Services/Academetrics has been released today, providing a measure of the average house price in Scotland for May 2012.
- Scottish house sales higher as housing market shows signs of recovery
- House sales 11% higher in first five months of 2012 compared to 2011
- House prices rise in Edinburgh and Dundee
Gordon Fowlis, regional managing director of Your Move, an estate agency chain that is part of LSL, comments as follows in the latest Scottish House Price Index from LSL Property Services/Academetrics published 18th July 2012.
“The housing market is bearing up well under the oppressive burden of fewer mortgages and a stuttering economy. House sales so far this year are 11% higher than the equivalent period last year, which shows the market is inching its way towards a more sustained recovery despite the fragility of the economic recovery.
“Prices are flat, but are higher than they were at the beginning of the year. Homeowners and prospective buyers have every reason to be cautiously optimistic now that we’re beginning to see some green shoots of recovery. More first time buyers accessed mortgages in May, although there is still an unhealthy reliance on wealthier borrowers and landlords when it comes to sales levels. Despite the high cost of rented accommodation, which pillages personal finances, plenty of first time buyers have said enough is enough and have rolled up their sleeves to piece together the big deposit required for a mortgage.
“The only note of caution is with regard to the future availability of mortgages. The biggest hurdle to a full recovery in the housing market is mortgage lending. The banking sector is in a sorry state, and lending, particularly to buyers with small deposits, has been suppressed over the last couple of months. On average, banks are demanding deposits to be twice as big as they were before the 2008 downturn. Tough deposit requirements are the major roadblock for first time buyers and the long-term recovery of house prices. Banks are terrified the ongoing rumblings in the eurozone could become louder over the course of the year, so are busy shoring up their balance sheets rather than trying to lend more to first time buyers.
“Prices on a local level are volatile, so would-be buyers and sellers would be wise to check on average prices in their area. Aberdeen and Glasgow saw prices fall in May, while Edinburgh and Dundee saw prices rise significantly. Prices at a local level will be dependent on how well their immediate economy copes with weak growth and public sector austerity.”