9th February 2011 back to news

Scots' property market 'picks up'

However, there are relatively high levels of sales optimism about coming months.
A total of 40% of respondents were positive about prospects, compared with fewer than 10% south of the border.

A big majority of RICS members surveyed in January (76%) said prices were flat over the past three months. A total of 19% reported that prices had fallen while only 4% registered a rise.

Scotland’s homes market looks less depressed than much of the rest of the UK, in a survey that covered a total 241 respondents.
Looking back three months and at the next quarter, London was the only English region with better price prospects than Scotland.
Analysis
Do you want property prices to rise or fall? Surveyors like them rising.
So do home-owners, and governments. It creates a feelgood factor.
People can borrow against rising values. But having done rather too much borrowing, and loans being tougher to secure, the prospects for an imminent return to property boom times are very limited.
Viewed from the first-time buyers’ perspective, prices still haven’t fallen enough, and big deposits are now required for loans.
Without those buyers driving the bottom end of the market, it’s hard to see past sluggish transaction levels and subdued prices.
Longer-term, however, the market for homes may be held up by the prospect of demographic change allied to housing shortages.
Graeme Hartley, Scotland director of RICS, said: “While some areas of Scotland’s housing market bring us good news and indications of stability in the market, such as the number of potential purchasers and the number of homes coming on to the market, uncertainty over the prospects for employment, alongside the shortage of mortgage finance particularly for first-time buyers, continues to weigh heavily on transactions levels”.

Among those responding, Andrew MacFarlane, of Graham and Sibbald in Hamilton, South Lanarkshire, said: “The market appears to be erratic and government spending cuts appear to be affecting the confidence within the residential property market place as a consequence of factors such as job security, disposable income and potential inflationary pressures.
“Take up of second-hand stock remains sluggish, while there is evidence of a growing demand for new build stock fuelled by housebuilders offering attractive incentive schemes.”

Craig Henderson, of Graham and Sibbald in Glasgow, said he was cautiously optimistic of improvements in market conditions in the next few months.
“While we have seen lower levels of activity through the last month or so of 2010, we have continued to see properties selling where the price sought is realistic and sellers’ expectations are correctly pitched,” he said.
John Bradburne, of Bradburne and Co in St Andrews, reported the market was “very negative and rather gloomy” saying: “Perhaps we are into the double dip economic scenario much heralded by economists a year ago”.

This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.

Photo: Craig Henderson, Partner, Head of Residential Department, Glasgow