October was a good month for the property market according to a slew of data released in the last few days. Mortgage approvals reached their highest monthly total since the start of 2008 and sales in Scotland were 21% up on the same month last year.
It’s all good news, but put the figures in to their historical context and you’ll see how much further there is to go before we get back to what might be considered a ‘normal’ market.
Scottish property sales were 21% up on the same month last year in October according to the Registers of Scotland. They have been above the same level a year ago in every month this year with the exception of February (see graph) and total sales this year are likely to reach 82,000 or so – the highest figure since 2008.
That is definitely a move in the right direction, but it is still a good deal below the level of transactions you might expect to see in a fluid market. Average sales today are around 7,000 a month. Average sales in 2004 were over 10,000 a month.
The latest data from the Bank of England shows that approvals to purchase property (i.e. excluding re-mortgages) reached 67,700 on October. The last time approvals were at that level was February 2008 – over five years ago. You can the number of approvals per month since 2008 here.
But take a look at the graph issued recently by the Council of Mortgage Lenders on mortgage lending in Scotland since 2006. You can see an improvement in lending this year, but lending to movers and first time buyers alike is still a long way below where it was in 2006.
As to prices, the Registers of Scotland (you can find their data here) estimates that the average selling price in Glasgow has recovered from a low point of £95,500 last year to £111,000 at the end of the last quarter. But that is still approximately 14.5% lower than its peak of £130,000 in 2007. You can find more information about house prices on this blog here and here.
In short, the property market is certainly making good progress but it is still some way from robust good health.