Wednesday, Aug 13, 2008
Och aye - it's different buyin hooses in Scotland
mortgagesolutions: House purchases fall but prices ease upwards
Scottish house prices continue to increase at a modest rate but the volume of transactions has fallen by 27%, according to the latest Scottish House Price Monitor from Lloyds TSB Scotland. In the three months to 31 July 2008, the quarterly price index for the average domestic property in Scotland rose by 1.6% to give an average mix adjusted Scottish house price of £172,185. On an annual basis, Scottish house prices have risen by 9.3%. Conversely, the number of house purchase transactions within the Scottish House Price Monitor has fallen by 27% since the same period last year. Professor Donald MacRae, chief economist at Lloyds TSB Scotland, said.....
Posted by jack c @ 03:58 PM (1100 views) Add Comment
16 Comments
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1. jack c said...
Few more stats from www.ftadviser.com/FTAdviser/Mortgages/News/article/20080813/2810ebf0-688a-11dd-af6e-00144f2af8e8/House-purchases-fall-in-Scotland-but-prices-rise.jsp
The north of Scotland has shown more resilience to the economic slowdown, with house prices in Aberdeen increasing by 8.8 per cent on an annual basis. Edinburgh and Glasgow, however, saw house prices lift by 1.9 per cent and 0.6 per cent consecutively in the three months to 31 July, compared with the previous quarter. Across Scotland, flats are showing a decrease of 1.7 per cent, and detached properties a decrease of 1.2 per cent. Terraced properties are showing a quarterly increase of 5.5 per cent and semi-detached properties are showing a quarterly increase of 7.2 per cent.
2. a saver said...
Oh no, just when I thought the HPC message was getting through up here -lack of mortgage funding means lack of mortgage funding both sides of the border, yes? Maybe this survey is based on asking prices? I am just not going to watch the Scottish Evening News tonight, they love to seize on Scotland's better messages like this. BTW, Aberdeen and Dundee prices are down the last quarter, so much for what they said about the strong Aberdeen market, underpinned by the oil boom.
3. it_is_going_with_a_bang said...
Well I'm not sure what price levels in Scotland are at, but if anyone thinks Scotland is immune from the economic problems that England is going to face and hence house prices then they are living on aother planet - by that I don't mean Scotland ... ;-)
4. Dundee said...
As someone who lives in Dundee, find above unbelievable, local branch of your move closed in past 2 weeks, major ea / solicitor laying off
50 staff, as a str myself was advised by solicitor that if either offers over or fixed price start 1st offer 20% lower min.
I know 1 local semi 3 bed have had on since xmas, 3 viewings and no notes of interest / offers, even lower end flats are struggling, And
this has not even started.
5. Indenial said...
Both Mortgagesolutions & Assetz should change their names to mine ! (Username)
6. Pundit said...
The property market in Scotland does not appear to operate with normal economic logic - at times it almost seems some great unseen force is at work. Over the last quarter, in many areas of Scotland the volume of property being offered for sale is at least twice that of the same period last year - with sales transactions down by some 30% this suggests a high level of unsold property is building up. Asking prices have continued to rise, although some recent evidence suggests actual selling prices are now beginning to soften.
The mechanics of buying and selling property in Scotland are very different from the rest of the UK. In Scotland the vast majority of property is marketed by solicitors, in some regions solicitors may have as much as 95% share of the market. Many solicitors have formed marketing ‘co-operatives’ which operate on a regional basis. Estate agents are restricted to a very small share of the market. When intending to purchase a property in Scotland, offers must be submitted ‘In an acceptable Scottish Legal Form’ through a Scottish solicitor. Scottish solicitors are therefore in an excellemt position to understand both sides of the buying and selling process.
Most property is marketed on the basis of ‘offers in excess of’ and historically property has sold at a premium of up to 10% over the asking price, in recent years premiums could be as high as 30- 40%. Purchasers make ‘blind’ bids for property, usually with some guidance from their solicitor on what might constitute a successful offer. The madness of the past few years has encouraged many purchasers to make excessive offers or risk losing the property.
Solicitors usually base their fees on a % of the purchase/selling price and are not recompensed for work associated with an unsuccessful bid. Many law firms are able to offer purchasers specialist advice on mortgages as a means of helping clients to maximise their chances of a successful offer.
Even in the current economic climate there are some individuals in Scotland that hold the opinion that it is morally wrong to offer below the asking price and are critical of the English system which so freely allows guzumping and guzundering.
7. nooneo said...
This is exactly what happened in spring/summer 2007 in England.
The bare minimum of transactions with some showing 'average' prices going up.
There is a mathematical formula I learnt at university that actually (and in some respects correctly) proves thath 1 = 0.
Lies, damn lies and property statistics.....
8. icarus said...
There was a piece posted here a couple of months ago which included an interview with an Edinburgh EA, who reckoned there were a lot of sweeteners from vendors to buyers in his neck of the woods.
9. montesquieu said...
Average house price in Scotland 172k.
Average salary in Scotland £22k
Multiple = 7.8 times salary.
Long term average = 3.5 times salary.
Trend price on this basis = £77k or 55% fall, should prices return to trend (assuming no over-correction).
Professor McVested-Interest is talking out of his hairy Morningside ar*se.
10. musn't grumble said...
I sold my house in Morayshire (between Aberdeen and Inverness) at the end of 2006 to a couple of 'white-flighters' (the very words they used) from England. In fact, 4 of the 5 people who offered on the property were from south of the border. However, I decided to move south because the summers (assuming we will ever see a proper summer again) were a good 2-3 months shorter than they are in England, and average wages were markedly lower. That combined with the higher cost of travelling down to see loved ones will, I suspect, lead to a reverse flow of sassenachs in the coming years and an inevitable drop in prices.
11. icarus said...
.....as I recall the sweeteners were upfront cashbacks which may have enabled the purchaser to raise the required deposit (not sure how that one worked since it sounds very dodgy legally).
12. Johnnyp said...
Scotland shall suffer the same falls in house prices just like the rest of the uk,so many houses here in Morayshire now on fixed prices or now actually reduced in price in the local paper.Trouble is people cannot accept that centiment has changed and for them selling now may have missed the boat and that boat will not return for many years ,bottom line is houses are UN AFFORDABLE now at the current prices they are !!!!!!! SCOTLAND-ENGLAND-WALES-N IRELAND WERE ALL IN THE SAME BOAT GET USED TO IT..
13. Pundit said...
The legal profession in Scotland benefits from higher selling prices as it works on a % basis when selling property - 50% drop in property values = 50% drop in fee income!!! Is it possible that asking prices are being artificially inflated by vested interests?
14. Mt said...
I'm afraid that rather nauseating "it's different up here" smugness must somehow creep into the statistics. What I'm seeing is a large increase in numbers on the market, very long selling times and a lot of fixed price. Look at the past 3 RICS surveys -- all showing a negative price outlook for Scotland.
Some people wouldn't notice a house price crash if it was wearing tartan and playing the bagpipes!
15. inflation is eating my savings said...
>Dundee@4
I agree- Blackadders (solicitors) is shelling 50 odd jobs. Grapevine suggests Thorntons (staff of nearly 400) are shelling over a hundred. Yet asking prices are still stupid (and getting more stupid). I know 4-5 people with places on the market for months. No-one has had an offer. Best is 4-5 viewings, worst nothing. The smart ones are catching rentals early. Rents are clearly dropping. In general, it seems to be good to avoid certain solicitors (like RSB MacDonald) they wouldn't even let me put a 10% lower offer last year (on a FP). Blackadders were ok, but I clearly got the idea that they thought I was being naughty- remember these guys all went to school together- so don't expect too much loyalty from your solicitor. They will need to bleed a bit more first. Interesting that a number of very large Perth Road pads have been dumped on the market recently. People in the know? I suspect they may think they think can hold out a few more months. The person with the money should win in these stand offs, in a propaganda-less situation.
What I don't understand is why the asking prices remain high even though jobs at these firms are being shed. I guess it is easier to sack people when there is a downturn?
Is it possible local regeneration has been ramped so much that these guys are psychologically conditioned never to see a dip?
16. Mt said...
Scotland at -4.5% according to this. Not sure if it's...ahem..."mix adjusted".
http://timesbusiness.typepad.com/money_weblog/2008/08/house-price-fal.html