Home prices fall biggest since 2009

Nov 14 2012

House prices in Scotland have dipped by almost 3% over the last year, the largest annual drop since 2009, according to a market index.

The average property price stood at £143,406 in September, down 0.3% on the month before.

The latest Scotland House Price Index by LSL Property Services said that, in the last 12 months, the average house price has fallen by 2.9%, which is the biggest yearly fall since November 2009.

A total of 22 local authority areas saw prices drop between October 2011 and September 2012, the largest of which were recorded in West Dunbartonshire (16.9%) and Midlothian (10.5%). However, 10 regions bucked the trend, with Inverclyde and Orkney seeing the highest increases at 5.5% and 5.4% respectively.

Edinburgh continues to be Scotland`s most expensive city, where the average price for a home is £216,792. Costs in Glasgow are significantly lower, with prices averaging £124,916. Dundee has the lowest property price (£118,257) of all seven cities, despite seeing a 1.7% increase over the last year.

Market specialists said the Olympic Games hit sales over the summer, with transactions falling by 17% between August and September.

Gordon Fowlis, regional managing director of Your Move, an estate agency chain which is part of LSL, said: "House prices lost some of their altitude in September but this wasn't a simple case of the market losing thrust.

"The Scottish housing market was still jet-lagged following the distraction of the Olympics, with the absence of buyers hitting the streets in August feeding through into a reduced number of sales in September. As fewer buyers competed for homes, reduced competition sent prices gliding down.

"Prices aren't heading for a crash-landing however - we've already seen sales figures rebound in England and Wales, and Scotland's likely to show a similar improvement in the last quarter of the year as buyers make up for lost ground over the summer.

"But there are reasons for optimism. The economy is growing once again while inflation is slowing, which should help buyers' spending power take off. On top of this, the Government's Funding for Lending is showing signs of helping the mortgage market start climbing again."