● Sales jump 9% on previous quarter and 32% on 2012
● Prices regain lost ground, but remain 2% below last year
● Selling times fall by a third
The property market in Glasgow and west central Scotland – the most populous area in Scotland – is seeing tentative signs of recovery. Selling times in the last quarter fell by a third compared to the previous three months, sales were up by almost a third on the same time last year and prices reversed some of the falls seen at the start of the year, although they remain 2% lower than a year ago.
The average selling price in the area is now £119,000. That is almost £2,500 lower than the same time last year, but represents a recovery of over £6,000 from a low point of £112,000 this spring. Average property values are now broadly back to where they were at the start of 2006.
Selling times, a key indicator of market health, fell sharply to 88 days, down from 133 days at the
start of the year. It is the first time that selling times have fallen below 100 days since mid-2010. Sales were 9% up on the previous three months and were 32% higher than the same three months last year.
Professor Gwilym Pryce of Glasgow University, who analysed the sales data from GSPC, commented: “The latest GSPC data reveal some encouraging signs of house price recovery in the West of Scotland. We have, of course, heard premature claims of housing market recovery before, so caution is definitely a wise strategy here. Nevertheless, taken at face value, the latest GSPC figures do offer some tentative reasons to be optimistic about housing market prospects in the West of Scotland.
From my point of view, this is the first time we have seen more sales, faster selling times and a recovery in prices since mid 2010. A new mood of realism among sellers has combined with improved mortgage availability and a greater sense of purpose among buyers to drive a significant increase in activity. All of that bodes well for the market as a whole.
But the story is more complex than simply a broad based improvement in market conditions.
In some locations, an increase in sales has been achieved through lower selling prices. While more affordable homes are selling well, larger homes are proving more difficult to sell and many properties are selling for less than home report value.
In other areas, especially the more desirable suburban locations on the outskirts of Glasgow and the West End of the city itself, there is some evidence of rising prices and faster selling times. In these locations, we are seeing a growing number of closing dates and, for the first time, properties selling for over their home report value.
It is these areas that have traditionally lead the way in the property market and we would expect to see the improvement in market conditions spread out from these centres.
Nevertheless, there is a long way to go. Any improvement is likely to be very gradual and patchy, with some locations experiencing better conditions long before others. As to prices, we don’t expect any significant change for some time to come. Incomes will have to rise faster than inflation for a sustained period before we see a return to house price growth.