News In Focus

Glasgow house prices firming

12 October 2012

House prices in west central Scotland are 3.6% higher on average than they were this time last year, according to latest figures rom Glasgow Solicitors Property Centre. The level of transactions however remains "subdued".

The average selling price in the area is now £128,500, up from £124,000 a year ago, but almost 12% below the 2007 peak of £145,000.

The increase is partly attributable to a sharp fall in prices in the autumn of last year, and there was little change in prices from the second quarter to the third quarter of 2012. Over the last two years, average selling prices have fluctuated are now at almost exactly what they were at the start of 2010.

Selling times – a key indicator of market conditions – are broadly the same as in autumn 2011, at an average of 119 days, compared with 116 days a year ago. Earlier this year the figure dropped to 105 days, but it was as high as 151 days 12 months before that.

Transaction numbers remain "subdued" and GSPC comments that there is no sign of an imminent recovery in activity. Sales in the last quarter were only marginally ahead of the same time last year and the sharp increase in sales recorded in the first few months of 2012 has not been sustained.

GSPC chief executive Mark Hordern commented: “An extended period of relative price stability is the normal response in the property market to a recession and we are seeing that happen again now. There will almost certainly be fluctuations in selling prices from quarter to quarter, but it is unlikely that we will see any sustained change either upwards or downwards for some time.

“The shortage of homes coming on to the market has supported prices and offset the effect of limited mortgage availability. We expect that the Funding for Lending scheme will gradually improve the supply of mortgages and so increase demand from buyers. As it becomes clear that this is happening, we expect a significant number of frustrated sellers to put their home on the market, so increasing supply. The overall effect will be broad price stability for some time."

• The "Funding for Lending" prediction appears to be borne out by news today that more lenders have announced cuts in mortgage rates. ING Direct and Nationwide Building Society have announced reductions in some or all rates, joining eight other lenders including Tesco Bank and HSBC making similar decsions over the past week. The scheme encourages lenders to offer more mortgages to people with smaller deposits than the 20% commonly demanded.