GSPC Quarterly House Price Data 

SIGNS OF STABILITY IN SCOTLAND'S LARGEST PROPERTY MARKET 

• Average prices fall nine per cent - well below UK average
• Pace of decline moderates
• Gap opens between Glasgow and surrounding areas
• Selling times lengthen as sellers stay put

The pace at which house prices in Glasgow and west central Scotland are falling has slowed in the last three months, raising the possibility that the worst of the falls in price are now behind us.  Annual house price inflation to the end of March was around nine per cent, compared to almost 10.0 per cent at the end of December last year.  The falls are well below the near 18 per cent falls reported by the Halifax for the UK as a whole.

The latest quarterly market report from GSPC (Glasgow Solicitors Property Centre) provides more evidence that house prices in Scotland are less volatile than elsewhere in the UK.  The GSPC analysis includes more transactions in the west of Scotland than any other index (with the exception of the Registers of Scotland) and is regarded as the most authoritative source of information on Scotland's largest property market.

Interestingly, prices in Glasgow appear to be a lot more stable than in other parts of west central Scotland.  Prices in the city fell by just five per cent in the last 12 months, compared to nine per cent for Strathclyde as a whole.  This reverses the early trend which saw prices in surrounding areas rising much faster than in the city itself.

Overall, the average price of a home in west central Scotland is now £131,000, a fall of £12,500 compared to a year earlier. In Glasgow, the average price now stands at £142,500, a fall of just over £7,500 over the last 12 months.  Prices now are broadly back to the level last seen in the summer of 2006.

Average selling times, the period a home is advertised for sale, have lengthened again, rising from 97 days at the end of December last year to 125 days today.  That takes selling times back to levels last seen in the late 1990s.  Part of the apparent increase in selling times may be down to greater caution about notifying GSPC of a sale until the deal is certain to go ahead.  But it also suggests that sellers are still reluctant to accept less for their homes than they had hoped.

This would also explain the substantial decline in the number of homes coming on to the market as would be sellers decide not to advertise their home for sale in adverse market conditions.  The number of homes being put up for sale has fallen by more than half compared to the same time last year, a trend that will increasingly limit buyer choice.

Professor Gwilym Pryce, who conducted the analysis of the GSPC data, says that it is impossible to predict when the housing market will pick up again, but that those who can buy now could do well: "There seems little prospect that the UK economy will recover anytime soon. However, in such turbulent times, tangible assets such as housing and gold are likely to be seen as a refuge for traumatised investors. For those able to purchase when prices are low, housing will be a particularly attractive long-term investment".

GSPC Chairman, Michael Samuel, argues that the slowing in the pace of price falls is indicative of improving market conditions: "Although transaction levels are still very low compared to earlier periods, we have seen steady growth in the number of sales since the start of this year and even a few properties selling at closing dates.  There is no doubt that steep falls in interest rates have taken the pressure off some home owners and made buying more affordable for some.  Most importantly, there are some early signs of an improvement in mortgage lending.  Bank of England figures show a steep increase in mortgage approvals in February and recent announcements by the Northern Rock and the Royal Bank of Scotland that they will increase lending suggest that the supply of funds should continue to improve as the year progresses. 

"These results suggest that prices could reach their floor some time this year and, while no-one is suggesting that prices will recover in the short term, the lack of new properties on the market will increasingly limit choice for buyers.  Anyone planning to move home in the near future might find that now is a surprisingly good time to take the plunge".

Glasgow: Average Price

Strathclyde: Average Price