Friday, Feb 15, 2008
Soft landing for Scottish house prices
The Herald: House price fall signals end of boom
Average house prices in Scotland have experienced a quarterly fall for the first time in seven years, signalling a possible end to the recent boom.
Between November 2007 and the end of January the cost of an average property fell by 1.6% to £163,211, figures published by Lloyds TSB Scotland yesterday showed.
Experts at the bank have said this points to the end of the country's property price boom, as the housing market "pauses for breath" and prices begin to level out.
Posted by little professor @ 12:05 AM (367 views) Add Comment
7 Comments
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1. little professor said...
Yet another soft landing story.
Scotland is lagging the rest of the country in its property market and awareness, The Scottish housing market arrived late to the boom party, and people up here are still partying despite the doom and gloom of those down south - after all, "it's different here."
Part of the problem is that Scotland was relatively unscathed in the last crash, as prices hadn't risen by as much in the preceding boom.
However over the last 2-3 years Scotland's property market has been soaring the way England had been for a few year prior. You are still getting people up here shelling out £££ for crappy riverside new-build "luxury apartments", with no hope of getting rental cover for the mortgage payments, in the belief that prices will only ever go up and the capital appreciation will make it all worthwhile.
See the "Glasgow Riverside Property" thread on the forum for more info - these apartment blocks are going to be the new slums of the 21st century when the music stops.
2. Montesquieu said...
Not sure that scotland was entirely unscathed last time, I returned home to the country in 1996 and picked up a flat in a rather posh part of the west end of Glasgow for £63,000 .... precisely £500 more than its owners paid for it in 1989.
Scotland - not even oil boom, bust and boom again Aberdeen - never saw the post-1989 50% falls of areas like Bradley Stoke (aka Sadly Broke) near Bristol but it certainly was affected last time (though perhaps the relatively low rate of owner occupation at the time meant there are few collective memories of the pain some people still went through).
I agree though about the naivety still around north of the border, on a trip home recently I still heard of people snapping up new build flats on the premise that 'the cooncil' needs somewhere to put its quotient of arriving immigrants etc and the DSS-sponsored rent is guaranteed to cover the morgage. The Sunday Mail doesn''t seem to be running BTL rip-off stories quite yet.
3. inbreda said...
A good start to Sus weekend!
4. su said...
Yes indeed, Imbreda! I'm smiling and even dancing around my (rented) house at the moment. :-)
The comment about increases in rent is a bit worrying though. Do you think this could be because there is a shortage of rented accommodation?
5. geed said...
About time someone reported the blo0dy thruth up here. Talk about head in the sand. Edinburghites truly think this place is built on gold and that "even in a slowdown (yes some people up here are starting to admit that there might be a slight chance of it happening) good properties will still be snapped up". Its like they all are secretly work for the ESPC. I reckon it is because poeple up here are hugely reliant on their properties percieved value, i.e...MEWing. I agree though little Prof, Scotland definietely lags the rest of the UK. I am expecting more of this bad news (not from the "Scotland is wonderful, better than everywhere else, we are different Scotsman" of course.
Its almost a swearword to say fall and property in the same sentence. I'll be blaspheming continually for the next few months then!
6. inbreda said...
Su - I would guess that increases in rents are coming from landlords desperately trying to cover their increasing mortgage bills. Once their properties have been empty for a few months, they get in arrears, and get repossessed, these rents will be removed from teh market.
7. su said...
4-bed houses in Fieldfare View, Dunfermline. (all look to be the same design)
One house available to buy: cost FP £205K
Two houses available to rent: cost £800 per month