Scottish housing market stabilises

This is according to the latest Scottish House Price Monitor from Lloyds TSB Scotland.

On an annual, underlying basis Scottish house prices have increased by 4.6%. In the three months ending October 2010, the quarterly price index for the average domestic property in Scotland rose by 3.7%. Following mix adjusting, the average Scottish house price is now £165,284.

The latest house price movement has been generated from a market with a low number of sales. The number of house purchases recorded in this quarter's Monitor is 17% down on the last quarter and 10% below the same quarter of last year.

When compared to 2009, for the market as a whole, Scottish house purchases in September of this year are 3% less. This is the second consecutive monthly fall in the number of house purchases following five consecutive months of increases. The number of housing transactions in the Scottish market is around half of pre-recession levels.

Donald MacRae, chief economist, Lloyds TSB Scotland, said: "The Scottish economy exited recession at the end of last year but then showed a decline in output in the first quarter of this year. After five quarters of declining output in the last seven, the Scottish economy recorded a robust increase of 1.3% in growth in the three months ending June 2010.

"The Scottish housing market has adjusted to this changing economic environment. Sales have halved but have now stabilised while prices, after an initial fall, are now showing an annual increase comparable to retail price inflation. There are no signs of a precipitate fall in house prices. Likewise there is little prospect of significant house price gains in the immediate future."