● Selling prices 7.4% higher than a year ago
● Sales strengthen
● Selling times shorten
● Flats drive rise in prices
House prices in Glasgow and the west of Scotland rose by over 7% in the last year – the strongest reading for house price inflation since the end of 2007. The average selling price in the area is now £120,000, up by £1,500 on the previous quarter and by just over £8,000 compared to the same time last year according to the latest GSPC property market report.
Transactions have also improved significantly with sales up by 30% on the same time last year. And properties are taking, on average, 20 fewer days to sell than they were 12 months ago.
Nevertheless, the headline figure for house price inflation is flattered by a low starting point. Prices fell sharply at the start of last year and recent price rises largely represent a reversal of that fall. Average prices remain broadly where they have been since the start of 2011 and 16% below their peak in 2007.
According to Professor Gwilym Pryce of Glasgow University, who analysed GSPC’s sales data: ‘This is the largest annual rise in house prices in the West of Scotland since the end of 2007. Looking at the raw data, it seems that much of the recovery has come from a rebound in the selling price of flats which experienced the largest drop in value since the peak in 2007/2008.
‘It is, of course, too early to pronounce a housing market recovery based on a single quarter, particularly since we have already had several false starts. But it seems likely that the sustained fall in selling times together with a shortage of new properties coming onto the market will continue to put upward pressure on selling prices, at least in the near future’.
From my point of view, the combination of higher selling prices, faster sales and more sales all suggest a sustained recovery in the west coast property market, lead by stronger demand for flats and affordable family homes.
But it’s important to put the recent increase in prices into context. The recovery in prices over the last year merely reverses some sharp falls a year ago; prices have broadly fluctuated around the low £120,000s since the start of 2011 and remain there today.
The key issue now is one of supply. The number of properties coming on to the market remain well short of sales and stock levels are declining as a result. If prices do rise further, it will be largely down to a shortage of sellers.